Romania ahead of Hungary in terms of GDP, recession inevitable this year
For a brief period this spring, Romania has surpassed Hungary in terms of GDP. However, six months later, our neighbouring country has once again surged ahead of us, signalling Hungary’s falling position in the region. Additionally, experts are forecasting an inevitable recession for this year. Is there a chance for GDP growth next year? We’ll examine this pressing question in our article.
Romania leads Hungary in GDP
Portfolio reported that Eurostat revised the EU GDP per capita statistics on the 11th of October. Romania briefly surpassed Hungary’s GDP performance this spring, but now, six months later, the neighbouring country boasts better statistics again. Hungary’s GDP capita stands at 76.6% of the EU average, while Romania performed slightly better at 76.7%. Although Hungary has been gradually closing the gap with the EU average, Romania has demonstrated significantly faster development, being 2.5 times as efficient as Hungary in this regard.
Hungary lags behind regionally
Examining the past decade, Hungary ranks 11th in the list of countries with the fastest convergence. Unfortunately, most of the countries preceding Hungary on the list are regional competitors. While Hungary’s performance is improving and approaching the EU average step by step, its regional performance is deteriorating. According to the latest GDP per capita statistics, only Lithuania, Croatia, Slovakia, Greece and Bulgaria have weaker performance than Hungary. However, Lithuania and Croatia could soon surpass Hungary in terms of development rate.
Inevitable recession
Világgazdaság reports a gloomy outlook for Hungary’s performance in 2023. Experts believe that the chances of Hungary avoiding a recession this year are slim. Gábor Regős, Professional Manager of Makronóm Institution, stated:
“Avoiding a recession this year would require a miracle.”
Analysts predict a decline of 0.9% by some, while others anticipate a 0.3% drop in 2023. Thus, all agree that Hungary is likely to end the year in a recession. The only hope lies in significant growth in the third and fourth quarters, though there are no signs of substantial development in the third quarter at the moment. Next year appears more promising according to experts and analysts, with most forecasting a growth of 3%, and some optimistic predictions reaching 4%.
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