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The Organization for Economic Cooperation and Development, better known as the OECD, raised Hungary’s economic growth forecast for this year to 6.0 percent from the 4 percent in the previous June report. However, he reduced 2023 from 2.5 percent to 1.5 percent in his latest economic forecast published on Tuesday.

The slowdown in growth in 2023 was explained by the economic consequences of the Russian-Ukrainian war, the decreasing external demand, and the slower expansion of household consumption due to shrinking real wages.

The OECD also lowered its inflation forecast for 2022 and 2023: from 10.3 and 7 percent in June to 13.5 and 12.7 percent respectively

– according to them, core inflation could reach 10.1 percent this year and next year, while five months ago they expected 9.3 and 6.1 percent.

Unemployment may decrease

The unemployment rate may be lower this year compared to the summer forecast of 3.8 percent, 3.5 percent according to the revised data, but may rise to 4.7 percent next year, 1 percentage point higher than in the previous report.

In its June forecast, the OECD calculated that the deficit of the budget as a percentage of GDP could decrease from 5.5 percent to 5.4 percent from 2022 to 2023, and in Tuesday’s forecast, deficits of 6.2 percent and 5.6 percent are indicated, respectively.

The deficit of the current account may decrease from this year’s level of 5.6 percent of GDP to 4.6 percent next year, which is 0.6 and 1.2 percentage points higher than the June forecast, according to MTI’s summary.

(Cover image: Zoltán Balogh / MTI)