OECD lowers Hungary 2022 GDP growth forecast to 4%

Analysis

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The OECD knocked down its forecast for Hungary's GDP growth this year to 4% in its biannual Economic Outlook published this week, state news wire MTI reports.

The forecast was lowered from 5% in December.

Hungary's government expects GDP growth to reach 4.3% this year.

The OECD said Hungary's "strong recovery", driven by "buoyant" domestic demand, is now threatened by the war in Ukraine.

It said wage pressure resulting from the tight labor market, together with high food and energy prices, will keep headline inflation "elevated until the end of 2022".

It forecast annual average inflation of 10.3% in 2022 and 7% in 2023.

The OECD sees Hungary's current-account deficit reaching the equivalent of 5% of GDP in 2022, before narrowing to 3.8% in 2023.

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