Hungary: Retail Data Could Bring Upside Surprise – ING

ING analyst Peter Virovacz noted that although Hungary's final Q2 2026 GDP is expected to confirm weaker-than-expected economic performance, there may be positive signals in the retail sales sector. Agriculture and construction were the main drags on the economy, while services and industry provided some support.

**Growth structure shows divergence**

On the demand side, investment was seen as a significant negative surprise, heightening concerns about the strength of the economic recovery. However, the outlook for consumption is relatively optimistic, with retail data expected to be a bright spot in an otherwise gloomy macro picture. This structural divergence indicates that Hungary's economy is undergoing an uneven recovery, and the resilience of domestic consumption could provide a buffer for subsequent growth.

**Policy environment and market impact**

On the monetary policy front, the National Bank of Hungary has already cut its policy rate by 25 basis points to 5.50%, with markets widely expecting the terminal rate to fall further to around 4.75%. If retail data does deliver an upside surprise, it could reinforce the central bank's view that inflation is under control, providing more room to continue its easing cycle. However, weak investment remains a downside risk that policymakers need to monitor closely.