Hungary in slight recession
September 5th, 2023As the GDP has been slowly shrinking for the fourth consecutive quarter, a business analyst lists five reasons that caused Hungary’s longest recession since 1996.
Commenting on the detailed GDP figures released by the Central Statistical office, István Madár remarks on Portfolio that the current recession is longer but significantly shallower than those during the 2008/09 credit crunch or the Covid crisis in 2020/21. (The output of Hungary’s economy decreased by 1 percent in the third quarter of 2022 but by only 0.1 percent in the second quarter of this year.) Madár identifies the number one cause of recession in the drastic rise in energy prices. Further factors include cuts in public spending since last year’s elections; unusually high inflation; the suspension of European Union transfers to Hungary and high interest rates. Madár hopes that the economy will start growing, though only slowly, in the third quarter.