Hungary's Economy Registers 0.3% Growth in 2025 Amidst Election Preparations

Modest Economic Expansion in 2025

Hungary's Gross Domestic Product (GDP) grew by 0.3% in 2025 on a seasonally and calendar-adjusted basis, as reported by the Hungarian Central Statistical Office (KSH). This figure, released on January 30, 2026, indicates a modest economic expansion for the year. The performance has been characterized by some analysts as 'near-stagnant' or 'sluggish'.

While the KSH reported 0.3% for the full year, other institutions provided varying forecasts and quarterly data. The European Commission and Erste Group had projected a 0.4% growth for 2025, while the International Monetary Fund (IMF) anticipated 0.6%. The Hungarian government's own economic strategy for 2025 had aimed for a more robust growth of over 3%. In the fourth quarter of 2025, the economy expanded by 0.5% year-on-year on a seasonally and calendar-adjusted basis, with quarter-on-quarter growth at 0.2%.

Factors Influencing Growth

The primary driver of Hungary's economic growth in 2025 was largely attributed to household consumption. This was supported by factors such as rising real wages and pre-election fiscal measures. However, this positive contribution was somewhat offset by other economic headwinds. Key challenges included:

• Weak industrial output
• Subdued investment
• Weak external demand from key trading partners, such as Germany
• Persistent inflationary pressures
• An elevated budget deficit, projected to be 4.6% of GDP in 2025 by the European Commission.

The economic outlook remains sensitive to factors like energy prices, uncertainties in the automotive industry, and global investor sentiment.

Political Landscape Ahead of 2026 Elections

The modest economic growth unfolds against the backdrop of an increasingly competitive political environment in Hungary. Parliamentary elections are scheduled for April 12, 2026. Prime Minister Viktor Orbán and his ruling Fidesz–KDNP alliance are preparing for what is anticipated to be a significant challenge to their long-standing rule.

The emergence of the opposition Tisza party, led by Péter Magyar, has reshaped the political landscape. Some polls indicate that the Tisza party is leading, presenting a formidable opponent to Orbán. The upcoming election is widely viewed as a referendum on Orbán's governance, with economic performance likely to be a key issue for voters.