The January 2023 forecast of the SZIGMA LEAD indicator, which expresses expectations for the Hungarian economy’s future performance in the short term, projects that at the end of the short-term (9-month) forecast horizon (October 2023), the Hungarian economy will grow slightly above its historical trend.

The high inflation environment is forcing central banks to raise interest rates. Hungary has the highest effective interest rate (overnight (O/N) deposit rate: 18.0%) in the region, following the October move by the Hungarian central bank.

In an environment of higher interest rates and higher inflation, the trend towards a preference for premium Hungarian government bonds with above-inflation yields over those with fixed yields continued.

The full report can be downloaded here: