Hungary's growth estimated at 2.3% in 2024, 3.3% in 2025: IMF

​​​​​​​By Ovunc Kutlu

ISTANBUL (AA) - Hungary's real gross domestic product (GDP) growth is expected at 2.3% this year, driven by domestic consumption, and 3.3% next year as investment gradually picks up, the International Monetary Fund (IMF) said Friday.

After the European country's economy contracted 0.9% last year, the disinflationary process remains on track and a modest recovery is underway, it said in a statement.

"The recession in 2023, elevated borrowing costs, and spending pressures are weighing on public finances," the IMF said in its Staff Concluding Statement of the 2024 Article IV Mission.

"Despite a less expansionary fiscal stance than in 2022, the headline deficit stood at 6.7 percent of GDP in 2023, as the recession reduced revenues and spending on interest and energy subsidies increased," it added.

Although headline inflation fell to 3.7% in June, the IMF warned that inflation could increase again if there are further disruptions to energy supply caused by an escalation of geopolitical risks or if wages grow faster than expected.