The trajectory of the Hungarian economy in 2021 was more favourable in terms of GDP growth than expected in the budget for 2021 amended at the beginning of summer. At the same time, equilibrium conditions turned out to be much worse than planned, with inflation and the general government cash deficit soaring, the forint weakening and the external balance turning into a significant deficit. A considerable part of the divergence can be attributed to the excessive use of demand stimulus policies, which can be linked to the elections. At the same time, the escalating conflict with the EU, which led to the withholding of transfers, as well as unfavourable developments in the global economy, such as the energy price hike and the related deterioration in the terms of trade, and global supply disruptions (e.g., chip shortages), also played an important role.
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