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Finance Minister: Growth expected at 3-4 percent in 2024

Hungary's economic prospects are heartening, with growth estimated at 3-4 percent in 2024, the finance minister told a meeting of the Official Monetary and Financial Institutions Forum (OMFIF) in Budapest on Thursday.

Hungary’s economy rebounded quickly after the coronavirus pandemic, Mihaly Varga told the meeting of the London-based think tank for central banking, economic policy and public investment. In 2021, the country’s GDP jumped by 7.1 percent, he added. The conflict in Ukraine dampened growth, but Hungary is expected to expand again in 2024, he added.

The labour market remained stable, with a low unemployment rate and a 75 percent employment rate, he said.

Inflation peaked at 25.7 percent in January and fell to 9.9 percent in October, he said.

The current account balance has improved in the first half of 2023, and the foreign trade balance is expected to hit a record. Hungary’s investment rate is the highest in the European Union, and it is expected to grow further, thanks to a 9 percent corporate tax, the lowest in the EU, he added.

The ESA deficit is expected to come to 5.2 percent of GDP this year and fall to 2.9 percent in 2024, he said.

Barnabas Virag, the deputy governor of the National Bank of Hungary (NBH), told the forum that breaking down inflation has been a challenge in central Europe. The fact that it is around 3 percent in the euro zone and the US is a good sign, he said. Inflation is expected around 7 percent in Hungary in December, he added. Three-month core inflation has fallen below 4 percent, he added.

The base rate is expected to be below 11 percent by year-end, and in single digits by February, he said.

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