Hungary’s economy remains at the back of the European Union. According to the second estimate published on 2 December by the Central Statistical Office (KSH), Hungary’s real GDP in the first three quarters of 2025 was only 0.2% higher than a year earlier. In the third quarter alone, GDP did grow by 0.6% year-on-year, but on a quarterly basis the economy stalled, with output flat compared with the second quarter.
Minister for National Economy Márton Nagy has admitted that in 2025 the government expects GDP growth of only around 0.5%. This marks a clear departure from earlier assumptions: the adopted budget initially projected 3.4% growth, later revised down to 2.5%, then to 1%. The current official forecast is therefore another step in what Hungarian business media such as Portfolio and outlets cited by Reuters have described as “bringing projections back down to earth.”
Services prop up GDP, industry and agriculture in retreat
KSH data show that in the third quarter, services were the main driver of growth. It was services — especially professional and scientific activities as well as trade — that added around 0.9 percentage point to the annual GDP growth rate. Household consumption rose by 2.6% year-on-year, with the volume of purchases of durable goods jumping by as much as 8.2%. Hungarian media, including Forbes.hu and Infostart, link this to rising real wages and cuts in income tax, which boosted consumers’ willingness to spend.
The picture in industry and agriculture is very different. Industrial output in the second and third quarters was around 3–4% lower than a year earlier, with the automotive sector hit particularly hard — monthly data showed declines in the range of 20–35%. Economists quoted by Hungarian portals point to a combination of weak foreign demand and the impact of higher US tariffs on selected industrial products. Agricultural value added fell by more than 6%, which KSH attributes to adverse weather conditions (drought) and animal diseases, including foot-and-mouth disease.
Hungary at the back of the EU
Compared with the rest of the European Union, Hungary’s performance is weak. According to Eurostat and European Commission data, EU GDP grew by 0.3% quarter-on-quarter in the third quarter, while the Hungarian economy remained stagnant. On an annual basis, EU GDP increased by around 1.5% on average, versus 0.6% in Hungary.
Economists stress that Hungary’s poor results are not only due to external factors (the slowdown in the euro area, high geopolitical uncertainty), but also to domestic problems: high inflation in previous years, delayed fiscal consolidation and tensions over EU funds. As ING and other research institutions point out in their latest analyses, the government in Budapest has been forced to revise up the 2025 deficit to around 5% of GDP, which limits its room to support the economy through public spending.
Uncertain growth outlook
In media appearances, Minister Márton Nagy tries to maintain cautious optimism, suggesting that growth could accelerate to around 2–3% in 2026 if external conditions improve and domestic consumption continues to rise. Forecasts by international institutions, including the European Commission, are more restrained: they assume growth of around 0.4–1% in 2025 and only gradual acceleration in subsequent years.
For now, data for the first three quarters show that the Hungarian economy is barely escaping stagnation, with the burden of sustaining growth falling mainly on services and consumption. If industry — especially automotive — fails to recover, and agriculture remains constrained by weather and animal disease, Hungary may continue to be one of the EU’s growth laggards in 2026 as well.
Source: CEO.com.pl – “Gospodarka Węgier stoi w miejscu. Wzrost po trzech kwartałach 2025 r. wyniósł tylko 0,2%”
