Hungary’s economy showed no growth in the first quarter of 2025, but the flat GDP figure masks deeper structural problems. Industrial output dropped by nearly 4%, investments plunged over 10%, and even a rise in household consumption couldn’t offset the decline. While services posted modest gains, they weren’t enough to balance the sharp downturn in manufacturing, construction, and capital formation.
The volume of Hungary’s gross domestic product stagnated according to raw data and was 0.4% lower according to seasonally and calendar adjusted and reconciled data in the 1st quarter of 2025 than in the corresponding period of the previous year. Compared to the previous quarter, the economic performance lessened by 0.2% according to seasonally and calendar adjusted and reconciled data.
The volume of GDP stagnated according to raw data and was 0.4% lower according to seasonally and calendar adjusted and reconciled data than in the same period of the previous year. The volume indices published in the second estimate were unchanged compared to the flash estimate.
Industry reduced its performance by 3.9%, within which manufacturing by 4.6% compared to the same period of the previous year. Among manufacturing branches, the largest contributor to the decrease was the manufacture of electrical equipment, while the manufacture of computer, electronic and optical products slowed the fall in industry the most. The value added of construction was 5.1% and that of agriculture 0.7% lower than in the corresponding period of the previous year.
The gross value added of services rose by 1.1% in total. The highest increase (3.5%) occurred in education. The value added of arts, recreation and other service activities increased by 3.1%, that of human health and social work activities by 2.4% and the value added of wholesale and retail trade by 2.1%. The performance of accommodation and food service activities was up by 1.7% and that of transportation and storage by 1.6%. The value added of financial and insurance activities grew by 1.3% and that of professional, scientific, technical and administrative activities by 0.9%. The performance of information and communication and of real estate activities both lessened by 0.1% and that of public administration by 1.2%.
The growth of services, within which wholesale and retail trade, contributed the most positively (by 0.7 and 0.2 percentage point, respectively) to the stagnation of gross domestic product in the 1st quarter of 2025.The performance of industry lowered the performance of the economy by 0.7 percentage point and that of construction by 0.2 percentage point. The balance of taxes and subsidies on products increased GDP by 0.1 percentage point, while agriculture did not have a significant impact on gross domestic product.
The actual final consumption of households was 2.2% higher than in the same period of the previous year. Household final consumption expenditure, representing the largest proportion of the components of the actual final consumption of households, rose by 4.1%. The (domestic) consumption expenditure of households realised on the territory of Hungary became 4.0% higher. The volume of domestic consumption expenditure increased in all durability groups: by 8.9% in the case of durable goods, by 1.7% for semi-durable goods, by 3.7% in the case of non-durable goods and by 3.9% for services.
The volume of social transfers in kind from the government declined by 6.6%, while that of the actual final consumption of the government became 7.3% higher. The volume of social transfers in kind from non-profit institutions serving households (NPISHs) became 1.7% lower.
As a result of the above trends, actual final consumption was up by 3.0%.
Gross fixed capital formation was 10.1% lower in the 1st quarter than in the corresponding period of the previous year. Both the volume of investments in construction and that of investments in machinery and equipment lessened.
Gross capital formation dived by 10.3% compared to the same period of the previous year.
As a result of the trends of consumption and of capital formation, domestic use as a whole grew by 0.4% in the 1st quarter.
In the external trade of the economy, a surplus of 1,237 billion forints was generated at current prices. The volume of exports lessened by 0.4%, while that of imports became 0.1% higher. In trade in goods, accounting for more than 80% of external trade, exports grew by 0.9% and imports by 0.7%. Within the external trade of the economy, the exports of services (including tourism) fell by 5.0% and their imports by 2.7% compared to the same period of the previous year.
The unadjusted, raw volume of gross domestic product remained unchanged in the 1st quarter of 2025. Actual final consumption contributed positively, by 2.2 percentage points to the economic performance, while gross capital formation and the balance of external trade as a whole influenced it negatively, by 1.9 and 0.3 percentage point, respectively.
In 1st quarter 2025 compared to previous quarter, according to seasonally and calendar adjusted and reconciled data the performance of the economy decreased by 0.2%.
From the production approach, the performance of agriculture went up by 4.6%. The performance of services diminished by 0.2%, that of construction by 1.1% and that of industry by 2.3%.
From the expenditure approach, the volume of household final consumption expenditure rose by 0.4% and that of the actual final consumption of the government by 1.4%, while that of social transfers in kind from the government decreased by 1.5% out of the components of actual final consumption. Gross fixed capital formation fell by 2.4%. In external trade, the volumes of imports and exports as a whole became higher (by 1.4% and 1.5%, respectively).
