IMF Staff Country Reports

Hungary: 2024 Article IV Consultation-Press Release; and Staff Report

Publication Date:

August 2, 2024

Electronic Access:

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Summary:

Hungary is emerging from a period of shocks. The pandemic, Russia’s war in Ukraine, and crisis-related stimulus widened fiscal and external imbalances and triggered double-digit inflation in 2022. Thanks to an effective monetary policy response aided by falling commodity prices and a tighter fiscal stance in 2023, inflation came down significantly, while the labor market and financial sector remained resilient. A large current account deficit in 2022 turned into a surplus, and output is starting to recover. However, significant challenges remain. The fiscal deficit and public-debt-to GDP ratios are well above 2019 levels, and various windfall taxes have created investor uncertainty. Interest rate caps and subsidized lending measures have distorted market rates, and a significant state presence in key sectors impedes competition.

Series:

Country Report No. 2024/268

Subject:

Financial sector policy and analysis Financial sector stability Housing prices Inflation Prices Public debt

Frequency:

regular