Nagy said his ministry put GDP growth at 2.5% for 2025 and 4.1% for 2026. The ministry forecasts GDP growth of 3.9% in 2027 and 4.1% in 2028, he added.
Nagy noted that the forecasts were around the middle of the National Bank of Hungary’s latest forecast ranges. He said expanding consumption, supported by real wage growth, a cap on markups on some food products, higher tax allowances and a PIT exemption for mothers of three, would drive GDP growth this year. He added that retail sales growth was at 4-5% at present and could reach 5-10% in H2.
Big investments that are set to start production in the near future will also make a significant contribution to GDP growth, he said.
A reform of Germany’s “debt brake” could add close to one percentage point to the country’s GDP, which would be a “great opportunity” for Hungary, he added.
He said inflation would accelerate temporarily to 4.5% in 2025, but could fall to 3.6% in 2026 before reaching the central bank’s 3% target from 2027. Nagy highlighted what he called “unjustified” price increases for food as well as banking and telecommunications services and said the government would do everything in its power to protect households.
He added that the prices of 884 of the some thousand basic food products affected by a mandatory cap on markups had fallen, by 18.1% on average. He put food price inflation around 7% in March and 5% in April.
Nagy said the government was “moving in the direction” of capping retail bank account fees at end-2024 levels.
He said talks with telcos on voluntary price limits were underway. Even though the government has phased out a telco tax, the prices of telecommunications services have risen by an “unacceptable” degree: by 15.6% year-on-year in February, including a 19.6% increase for TV, internet and telephone services, he added.
Telcos are likely to get a week to prepare to roll out new tariffs, he said.
Nagy said average wage growth could remain over 8% in 2025-2029. He also noted that work on drafting the 2026 budget had started and the bill could be approved by lawmakers in the summer.
Fielding questions, Nagy said he saw no chance of retail and banking sector taxes being phased out. He said a bill had been drafted that would cease the National Bank of Hungary’s foundation-related activities.
Nagy said it was still too early to draw conclusions regarding the impact of United States tariffs on car imports.
He added that car makers were involved in intensive behind-the-scenes negotiations. A bill on raising the threshold for investment funds’ holdings of government securities will be submitted during the week, he said, adding that there was no reason to modify this year’s debt financing plan.
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