The projection was raised from 3.6% in the spring forecast released in May.
The EC acknowledged that Hungary's economy continued to "grow rapidly" in the first quarter, supported by strong employment and private sector wage growth, as well as by a tax refund for parents raising children, public sector pay rises and a pension bonus. Exports also "grew briskly", boosted by strong demand and the gradual easing of supply chain disruptions, the EC added.
The EC said Hungary's economic growth is set to "slow down markedly" in the coming quarters, pointing to lower business and consumer confidence and flattening out industrial production and retail sales in April and May.
"The slowdown is expected to affect all demand components and be driven by rising inflation, tightening fiscal and monetary policies, as well as trade disruptions and rising uncertainty in the wake of Russia's war of aggression against Ukraine," it added.
The EC put Hungary's GDP growth at 2.1% for 2023.
The EC forecast average annual inflation of 11.8% in 2022 and 7.6% in 2023.
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