The economy of Hungary stagnated in the 1st quarter of 2025: based on unadjusted, crude data the GDP was identical with the same period of the previous year’s level. As in 2024, domestic economic trends have been characterised by duality. The increasing consumption of households had a positive impact on GDP. At the same time the continuing decrease of gross fixed capital formation, due to a partial loss in EU funds, setback in state supported orders, market uncertainties as well as the completion of high base generating large investments, had an unfavourable effect. The balance of the external trade deteriorated overall as a result of the lessening export surplus in services. The growth of real earnings supported the increasing household consumption while inflation grew once again. On the production side the overall growing performance of services impacted positively the 1st quarter of 2025 performance of the Hungarian economy, its effect, however, has been wiped out by the volume decreases in industry and construction. (Agricultural performance was also moderately below the one year earlier level, but this fact did not have an impact in merit on the GDP volume change.)
The volume of industrial output lagged behind the one year earlier level by 4.4% in the 1st quarter of 2025. The decrease is constant since the beginning of 2023. Production dropped in the majority of significant manufacturing subsections, moderated by volume growth in the electronics industry, with its significant weight, as well as in the wood, paper and printing industry, the manufacture of chemicals and chemical products and in the pharmaceutical industry.
Production in construction, at comparative prices, lagged behind the one year earlier level by 5.7% in the 1st quarter of 2025. During the first three months of the year 2704 new dwellings have been put into use, 2.7% fewer than in the 1st quarter of 2024. Rent prices continued to increase, being 7.6% higher in March on national average year-on-year. Rent prices’ nominal growth rate was higher than that of inflation, as such their real value grew by 2.8%. The volume of the end-of-March construction stock of orders increased by 3.8% year-on-year, the number of dwellings to be built based on construction permits and simplified declarations issued in January-March was one quarter higher than in the 1st quarter of 2024.
The calendar adjusted volume of retail trade grew by 2.8% in the January-March 2025 period compared to a year earlier. The turnover growth is continuous since the beginning of 2024. Sales volume of specialized and non-specialized food shops surpassed the same period of one year earlier level by 3.1%, non-food selling retail shops registered a 5.5% increase compared to the 1st quarter of 2024. Turnover at automotive fuel stations grew by 0.7%.
Guests spent 7 million 252 thousand tourism nights at accommodation establishments in January-March, surpassing by 1.1% the same period of the previous year’s value. The turnover growth at accommodation establishments was generated by a 6.9% increase of foreign tourism nights, while domestic tourism nights lessened by 5.6% year-on-year. Turnout volume decreased overall in food and beverage service activities by 0.3% year-on-year.
The performance of freight transport lagged behind the first quarter of 2024 by 6.4%. Within it the performance of the two directions decreased: the domestic one by 3.8%, the international by 7.4% compared to January-March 2024. Rider numbers in passenger transport lessened by 2.5% in local destinations, and grew by 20% in the intercity one, in the 1st quarter of 2025 year-on-year. Passenger traffic grew by 15% at the Budapest Liszt Ferenc International Airport year-on-year, and surpassed the pre-pandemic level of the 1st quarter of 2019 by 27%.
Pressure of the inflation grew in the Hungarian economy in the 1st quarter of 2025. Consumer prices were on average 5.3% higher in the first three months of the year than in the same period of the previous year. Domestic price hike was the highest in the European Union. The speeding of inflation was caused primarily by food and services price increases. The fact that producer prices in industry and in agriculture grew by 8.2% and 18.5% compared to the same period of the previous year, had an impact on the 1st quarter of 2025 inflation, while in foreign trade, the import of goods became 4.6% more expensive. Construction producer prices grew by 5.4%.
Considering the factors impacting population numbers 7.1% fewer births and 5.2% more deaths were registered in January-March 2025 than in the same period of 2024. Natural decrease speeded up year-on-year, lessening the population by 17 536 people.
Employee number stagnation, decreasing unemployment, high economic activity level (68.2% among the 15–74 age group), a 3.9% decrease in the potential labour reserve (311 thousand people) as well as a 1.4% lessening (69 thousand) of unfilled positions defined Hungary’ labour market in the 1st quarter. There were 4 million 692 thousand employed people among the population aged 15–74 in the 1st quarter of 2025, basically identical with the previous year. Employment rate of the population aged 15–64 grew in one year by 0.4 percentage points to 75.2%, this being the highest rate considering the 1st quarters of the previous years. The average number of unemployed people aged 15–74 decreased by 14 thousand (6.2%) year-on year to 213 thousand people, while the unemployment rate lessened to 4.3%. The proportion of those unemployed for at least one year increased to 36%.
Gross average earnings of full-time employees amounted to HUF 680 400 in January-March 2025, 9.2% higher year-on-year, while net average earnings including tax benefits reached HUF 467 600, being 9.1% higher than in January-March of the previous year. The change in the average earnings was triggered basically by previously scheduled wage, minimum wage and guaranteed minimum wage increases. Real earnings grew by 3.6% in the 1st quarter of 2025 along with a slightly higher than in the previous year, 5.3% growth in consumer prices. The median value of gross earnings was HUF 539 700, representing an 8.8% increase compared to January-March of the previous year, the median value of net earning including tax benefits was HUF 374 100, also surpassing the one year earlier value by 8.8%.
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