THE MACROSCOPE REPORT HUNGARIAN ECONOMIC OVERVIEW Q1 2023
IS THE WORST OVER YET? In the middle of Q1 2023, it seems we are almost through the worst of the economic downturn. In the early fall of 2022, amid skyrocketing European energy prices and energy supply uncertainty, one could only have hoped for the rapid and positive turnaround that finally took place. At the end of January, European gas prices (Dutch TTF futures were in the range of EUR 50-60 per megawatt) were roughly one-sixth or one-seventh of their late August peak. Electricity prices have come down by a similar magnitude.
GDP CHANGE (YEARLY AND QUARTERLY) 15.0 10.0 5.0 0.0 2021 Q1
2021 Q2
2021 Q3
2021 Q4
GDP change %, yoy
2022 Q1
2022 Q2
2022 Q3
GDP change %, qoq Source: KSH
With the previous extra-high energy prices in the summer and autumn months of 2022, industry in Hungary and much of Europe faced the prospect of a severe loss of competitiveness and the most profound financial challenges. Rising energy import bills caused huge external imbalances that were barely financeable in some countries (including Hungary). By the end of 2022, it became apparent that the larger part of Europe had managed to become independent of Russian energy imports, meaning that in 2023 we no longer face the risk of not having the necessary quantities of energy supply (be it crude oil, natural gas, or coal). This is a much more reassuring environment than that which we recently faced. 01 1