The study comprises two parts – the first, written in April 2020, gave an overview of economic developments in 2019 while the second part, written in September 2020, analyzed the turbulent economic changes in the first half of 2020. 

The structure of the two parts is similar. The first chapters provide a brief overview of the international environment of the Hungarian economy. The second chapter analyzes the macroeconomic developments in Hungary (in 2019 and the first half of 2020, respectively), with separate analyses of the first quarter – that was only slightly affected by the COVID crisis – and the second quarter, the period during which the economy suffered a sudden shock due to the pandemic. An analysis of the changes of individual components of GDP – and the connections between those changes – is provided on both the production and expenditure side. The chapter also discusses changes in the balance of payments and labor market developments. The third chapter in both parts gives an overview of fiscal and monetary developments, with a special focus on the impact of the crisis on the fiscal situation in general and on the most important revenue and expenditure items in particular. 

While writing the first part of the study, at the end of April 2020, we had to give an economic forecast for the year when everything was in flux, and the impact of the crisis was very hard to assess. Despite the high level of uncertainty, the April forecast of Kopint-Tárki proved almost spot-on: it predicted a GDP fall of 5.5 percent for 2020, with the assumption that the epidemic would taper off by the end of summer, and economic decline substantially softens by the last quarter of the year. That assumption was too optimistic: instead of waning, the pandemic returned with a vengeance in autumn. 

As a result, we slightly revised our GDP forecast in the second part of the study in September 2020, from -5.5 to -5.8 percent. We also revised the prediction regarding the 2020 fiscal deficit upward, to 8.9 percent of GDP.