Richard Parks Hungary has unexpectedly fallen into recession, marking its second such occurrence in two years, as indicated by two consecutive quarters of declining gross domestic product (GDP).
Preliminary estimates from the Hungarian Statistical Office (KSH) reveal that the GDP shrank by 0.7% in the third quarter (Q3) compared to the same period last year. This decline is mirrored by a 0.7% decrease from the previous quarter, following a slight drop of 0.2% in the three months leading up to June 30. These figures confirm that Hungary’s economy has entered a recession, characterized by two consecutive quarters of negative economic growth.
The contraction has been primarily driven by poor performance in critical sectors such as agriculture, industry, and construction, which together account for roughly one-third of the national economy. These sectors have faced numerous challenges, including adverse weather conditions affecting agriculture and supply chain disruptions impacting industrial output.
On a slightly positive note, the services sector has shown resilience, helping to mitigate some of the overall downturn. While the performance in agriculture and industry has been disappointing, the services sector has maintained a steadier trajectory, indicating some areas of stability within the economy.
Despite the current challenges, KSH noted that the GDP for the first nine months of the year remains 0.7% higher than in 2023. This suggests that earlier in the year, the economy was able to achieve growth, highlighting the potential for recovery if the underlying issues can be addressed.
Analysts will be closely monitoring Hungary’s economic performance in the coming months, as policymakers face the challenge of stimulating growth while addressing the factors contributing to the recent recession.