The volume of GDP increased by 0.5% in 2024. Based on data adjusted for calendar effects, the economic performance increased by 0.6% compared to the previous year.
In the first quarter of 2025, the Hungarian economy contracted slightly, by 0.4% on an annual basis and by 0.2% compared to the previous quarter, dragged down by weak external demand and industrial exports, and by still sluggish investment performance.
The average annual inflation rate was 3.7% in 2024.The decline in global inflation came to a halt in the autumn of 2024, with consumer price inflation starting to accelerate again in several countries, including Hungary.
Although the investment rate has declined in recent years, it remains high, and Hungary remains an attractive investment destination. The investment rate has stabilised at a high level because of recent time’s high-volume investments, reaching around 24% in 2024, one of the highest in the EU.
However, investment in several sectors is being held back by weak demand, particularly in manufacturing and construction, which is not yet being offset by the huge amount of working capital investment. Nevertheless, the Demján Sándor Programme for SMEs may improve the investment climate for businesses.
At the end of 2024, 707 329 enterprises operated in Hungary, 99.9% of which (706 380 enterprises) qualified as SMEs. Hungarian SMEs are responsible for 70.1% of the total employment and 56.8 % of the value added.
The total corporate loan portfolio of credit institutions increased by 1.6%, and the SME loan portfolio increased by 1.9% in 2024. This shows a continued slowdown in the portfolio growth rate. Corporate lending is currently subdued, primarily due to insufficient demand factors.
Although the total loans outstanding remained nearly unchanged, the portfolio of foreign currency loans continued to grow in 2024.
2024 brought a seemingly strong recovery for the Hungarian venture capital and private equity market, especially when compared to the low baseline of 2023. While the top-line numbers for 2024 suggest a return to growth, the underlying data, especially the reliance on one large buyout, indicates that it is not yet in full recovery. Rather, 2024 may mark the first signs of stabilisation and renewed investor interest. It was expected that 2025 would bring more broad-based growth and consistent capital flows across all stages and sectors of the Hungarian VC and PE ecosystem.
The focus of the new economic policy announced by the Government through Government Resolution 1311/2024. (X. 21.) aims to put the economy on a higher growth path in 2025. According to the government decision, in order to dynamize the economy, the performance of Hungarian-owned SMEs must be further strengthened so that they contribute more to growth.
In order to achieve this, the Government is supporting the development of domestic SMEs with a total of nearly HUF 2 000 billion through the Demján Sándor Program, which consists of 8+1 measures implemented as part of the New Economic Policy Action Plan.