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Fears of recession

September 27th, 2022

A leading economic analyst fears that the combination of rapidly growing inflation, high energy prices and an economic slowdown in Germany may cause a deep recession in Hungary as well.

On Portfolio, Dávid Németh, analyst of K&H Bank fears that Hungary may have to face a deep recession. He points out that despite galloping inflation, the EU has so far proven relatively resilient in terms of growth. But high energy prices and inflation will severely harm Hungarian households as well as the national economy, Németh notes, adding that higher prices impact poor families much more than wealthier households. Németh also sees a potential German energy shortage as a major threat for the Hungarian economy. He acknowledges that it is extremely difficult to make projections, but he fears that after stagnating in 2023, Hungarian economic output may decline by 2-5 per cent in 2024.

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