The Hungarian economy is going through a period of prolonged stagnation, accompanied by significant imbalances, according to several economic assessments. In the last three years, economic growth has been almost non-existent and financing the state has become more difficult and expensive.
Hungarians are not ready for possible economic adjustment measures/PHOTO:X
The data shows that the gross domestic product in 2025 exceeded the level of 2022 by only 0.1%. By comparison, the European Union economy grew by about 3% in the same period, while Poland registered an advance of about 7%.
This stagnation is accompanied by unfavorable developments in macroeconomic indicators. Inflation remained high, after double-digit levels in 2022–2023, and the budget deficit consistently exceeded official targets. In the first months of the current year, the deficit has already reached a large part of the level planned for the whole year.
Declining investment and uncertainty
The volume of investment has fallen significantly, reaching about three-quarters of the level three years ago. Among the causes are the blocking of European funds, but also the lack of predictability of economic policies, which affects investor confidence.
Critics argue that economic policies have been marked by frequent and unpredictable interventions, including tax changes and administrative price controls. In this context, companies tend to either avoid visibility or focus on accessing public resources.
The economic model is frequently associated with the government led by Viktor Orbán, characterized by cycles of easing and tightening of policies, often linked to election periods, writes the independent Hungarian publication Telex.
The relationship with the European Union
The tense relations with the European Union led to the suspension of a significant part of the European funds intended for Hungary. At the same time, the country's external orientation generated criticism within the EU bloc, including because of its positions considered close to Russia.
Economists warn that economic and political isolation could have long-term consequences, given that alternatives – such as intensifying economic relations with states outside the EU – have so far not generated significant results.
Financial pressures and relegation risks
Amid rising deficit and financing costs, Hungary is becoming increasingly dependent on investor confidence. Rating agencies recently warned of the risk of a downgrade, stressing the importance of the credibility of fiscal policies after the election.
A potential downgrade could lead to higher borrowing costs and more difficult access to external financing.
Possible scenarios after the elections
Regardless of the outcome of the election, the next government will have to manage a difficult economic situation. The experience of previous years shows that corrective measures are often delayed but become inevitable.
If the Fidesz party retains power, analysts expect gradual adjustments, possibly through indirect measures, without major structural changes.
In the event of a change of government, the Tisza formation, led by Péter Magyar, indicated as priorities the unblocking of European funds, fiscal reforms and the reevaluation of the budget. However, the implementation of these measures could be complicated by economic and institutional constraints.
A complicated external context
The situation is compounded by international developments, including tensions in the Middle East and their impact on energy markets. Recent forecasts point to a slowdown in economic growth and a deterioration in budget balances.
An unprepared society?
In this context, analysts believe that society is not fully prepared for possible economic adjustment measures. Public debate on these risks has been limited, and the necessary measures – including spending cuts or structural reforms – may be difficult to accept.
In the medium term, Hungary's economic direction will depend on the future government's ability to restore macroeconomic balances and regain investor confidence in a complex domestic and international environment.
