Victor Zsiday, an investment fund manager, believes that Hungary's budget deficit for 2023 will exceed the 6 percent forecasted by the Ministry of Finance. He considers the government's expectation of reducing the deficit to 2.9 percent by 2024 as unrealistic, given it could significantly slow down the economy. He also doubts the ability to reduce inflation to 4 percent, despite a government official's recent suggestion. Zsiday points out that further interest rate cuts could lead to a weaker Hungarian forint and that wage increases of over 10 percent would counter efforts to control inflation.
Looking ahead, Zsiday expects that many investors will sell their inflation-linked government bonds once the returns become less attractive after 2025. He suggests that the Hungarian Debt Management Agency will need to respond to this potential shift in the bond market.
Zsiday is also unclear on how Hungary could adapt its foreign policy anticipating a potential return of
Donald Trump to the U.S. presidency and the implications that may have for Chinese investments, given Trump's previous tough stance on China. Additionally, he questions the direction of the Orbán government's EU policy and underscores the skepticism among investors about when and how much EU funding Hungary will receive, emphasizing the high level of skepticism among his conversations with investors regarding the expectations of the market.