Hungary's final second-quarter GDP data is expected to confirm a weaker-than-anticipated performance, according to ING's Peter Virovacz, with agriculture and construction sectors acting as significant drags on growth, while services and industry are anticipated to provide some support [1]. Investment activity is highlighted as a major negative surprise on the demand side, potentially representing the most important factor behind the disappointing quarter [1].
Despite the lackluster second quarter, early data for the third quarter, particularly July retail sales, may offer a brighter outlook. ING expects a rebound in retail performance, attributing this potential upside to the positive effects of the FIFA World Cup, which boosted both food and non-food retail segments [1]. Additionally, lower fuel prices in the first half of July, combined with expectations of future price increases, may have led to increased fuel sales, further supporting the possibility of an upside surprise in the July retail sales figures [1].
The Statistical Office is set to release further details on second-quarter economic activity, with the final 2Q26 GDP data scheduled for 1 September, and the first hard data for the third quarter, including July retail sales, to be released on 4 September [1]. ING's analysis suggests that while the second quarter was disappointing, there is cautious optimism for a retail-driven rebound in the third quarter [1].
CONCLUSION
Hungary's economy faced a weaker-than-expected second quarter, mainly due to underperformance in agriculture, construction, and investment. However, ING anticipates a potential rebound in retail sales for July, driven by World Cup effects and lower fuel prices, offering some optimism for the third quarter.