Publication date: 03-05-2025
Hungary is a member of the European Union and part of the European single market, located in Central Europe and sharing borders with Austria, Slovakia, Ukraine, Romania, Serbia, Croatia, and Slovenia. It operates an export-oriented market economy with foreign trade playing a central role. In 2023, Hungary’s exports exceeded €81 billion, of which 79% were directed to other EU member states. Germany remains Hungary’s most important trading partner, accounting for 26% of its exports. Hungary retains its national currency, the Hungarian forint (HUF).
The country benefits from relatively high income levels and maintains a broadly diversified economy. However, it is also among the most energy-intensive economies in Europe, with continued high dependence on Russian energy imports. This makes the economy vulnerable to renewed energy shocks or geopolitical disruptions.
Economic growth in Hungary remains positive but moderate, with estimates for 2025–2026 pointing to growth above 2% year-on-year. This is despite headwinds from weak external demand and uncertainty around potential new U.S. tariffs on European exports. In the medium term, however, stimulus measures in Germany and any positive geopolitical developments—such as progress in peace negotiations in Ukraine—could support Hungary’s export performance and overall growth trajectory.
From a fiscal standpoint, Hungary’s debt levels are elevated by peer comparison. The government debt-to-GDP ratio is 75% in 2024, significantly above the 59% median for countries rated in the BBB category. Interest expenses are also high, reaching around 9% of government revenue. In 2023, the fiscal deficit stood at 6,1% of GDP and narrowed only modestly to 4,9% in 2024. The Ministry of Finance has outlined a path toward consolidation, targeting a deficit of 1,5% by 2028. However, with critical parliamentary elections scheduled for April 2026, this timeline may be challenged by increased pre-election spending.
Despite elevated debt levels, Hungary faces no immediate funding risks. It continues to enjoy access to a range of domestic and international funding sources. These include the domestic banking sector, a retail bond market, and regular issuances on international capital markets across multiple currencies—including euro, renminbi, and yen. As of August 2024, foreign-currency-denominated debt comprised 28% of Hungary’s total debt, providing a relatively balanced funding profile.
Hungary’s current account—which reflects the net balance of trade in goods and services, investment income, and transfers—recorded a surplus of 2,2% of GDP in 2024. This surplus helps to support the stability of the Hungarian forint and underpins the government’s ability to meet external debt obligations, reducing pressure on foreign exchange reserves and overall creditworthiness.
Inflation has moderated significantly from its 2023 highs, reaching 5,6% year-on-year in December 2024. However, the trend remains volatile and is accompanied by exchange rate fluctuations, with the forint trading above 400 per euro. As a result, the National Bank of Hungary (NBH) has maintained a cautious monetary stance, with the base rate currently at 6,5%. Gradual policy easing is expected in the second half of 2025, provided inflation and exchange rate dynamics remain manageable.
Hungary’s 5,375% bond due in Sep 2033 offers exposure to this evolving macroeconomic landscape. The bond is rated BBB by all three major credit rating agencies, reflecting the country’s solid credit standing. Hungary benefits from a diversified economy, strong external account position, and relatively low levels of foreign-currency denominated debt. While political and external risks remain present, these structural strengths continue to underpin the country’s resilience in the face of fiscal and monetary challenges.
as of 31.12.2024
| Column 1 | Column 2 | Column 3 | Column 4 | Column 5 | Column 6 |
|---|---|---|---|---|---|
| GDP, EUR bn | 196,6 | Debt/GDP | 75 % | Inflation | 4,6 % |
| GDP per capita, EUR th | 22,5 | Foreign currency debt / Government debt | 28 % | Unemployment | 4,3 % |
| GDP growth, yoy | 0,6 % | Interest expense / Government revenue | 9 % | Central government balance / GDP | -4,9 % |
| Current account / GDP | 2,2 % | Reserves / foreign-currency debt | 108 % | Policy rate | 6,5 % |
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