Still no GDP growth in Q3

HUNGARY - In Brief 30 Oct 2025 by Istvan Racz

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GDP remained stagnant in Q3, with 0% qoq growth in real terms, seasonally and day-adjusted, according to KSH's preliminary data published today. This implied 0.6% yoy growth, following 0.2% yoy in Q2 and -0.3% yoy in Q1. In the first three quarters together, GDP expanded by 0.2% yoy only. As the following chart shows, there has been essentially no growth in the domestic economy since the middle of 2022, this means. The new GDP data was very much unsurprising: Portfolio.hu's analyst poll resulted exactly this median expectation, which was also our prediction for Q3, as regards the single-quarter growth rate. The poor showing of agriculture and industry, plus a spectacular collapse of construction output (-12.6 yoy) in August did not allow any forecast substantially different from the actual number. Consumer demand growth could have led to more expansion on the supply side, but much of that extra demand was satisfied through increasing net imports. In a longer-term perspective, the factor's behind the complete lack of growth over the past three years include the weakness of German carmakers, a loss of markets by the Korean battery producers present in Hungary, the deterioration of the country's climate with global warming, the impact of the war in Ukraine in various fields, the impact of fiscal adjustment, the loss of EU transfers, and decreasing private sector fixed investment, not least because of the government's interventionist policies and controversial attitude towards FDI. The government and the MNB have maintained a sharply downsized 0.6% GDP growth forecast for this year in recent months. Given that forecast, there seems to be no reason for any policy change bec...