Although the war in Ukraine will set back the post-pandemic global recovery, Hungary and Poland will lead economic growth in Central Europe, the International Monetary Fund said in its spring 2022 World Economic Outlook.
Economic growth in both countries will be lower than projected in the organization’s October forecast.
The International Monetary Fund estimates that Hungary’s gross domestic product (GDP) will grow by 3.7 percent this year and 3.6 percent next year. In its October report, the IMF expected another 5.1 percent growth by 2022 after last year’s 7.1 percent expansion.
Inflation could accelerate to 10.3 per cent this year from 5.1 per cent last year, up from 3.6 per cent expected in October; next year, the pace will slow to 6.4 percent as forecast.
The unemployment rate will rise from 4.1 per cent last year to 4.3 per cent this year, and will fall to 4.2 per cent by 2023.
According to the IMF’s forecast, Poland will achieve the same economic growth of 3.7 percent this year as Hungary after 5.7 percent last year. In October, the IMF expected GDP growth of 5.1 percent by 2022. Next year, the growth of the Polish economy may slow to 2.9 percent. In Poland, after 5.1 percent last year, inflation could be 8.9 percent this year and 10.3 percent next year. The unemployment rate may fall to 3.2 percent this year and three percent next year, after 3.5 percent last year.
Regarding Ukraine, the IMF said it currently estimates that GDP could shrink 35 percent this year after last year’s 3.4 percent increase; the IMF did not provide a forecast for any other indicator.
The IMF forecasts that Russia’s GDP could shrink by 8.5 percent this year after a 4.7 percent increase last year, and drop by a further 2.3 percent in 2023. Inflation could be 21.3 percent this year and 14.3 percent next year, after 6.7 percent last year. Unemployment will rise from 4.8 per cent last year to 9.3 per cent this year, and the rate will fall to 7.8 per cent next year.