Front runner in asset management within the CEE region
The current ratio of total assets to GDP (Gross domestic product) in Hungary is approximately 20%, significantly below European means of 40-80%. However, this positions Hungary as a front runner in the CEE region (Central Eastern Europe) in terms of financial market development, placing it ahead of even Poland and Czechia. We project a partial convergence towards the average on the continent within the next 5-10 years.
Development of the Hungarian economy
A crucial factor here is the development of the Hungarian economy. In our forecasts we assume nominal GDP growth in Hungary to be around 3-4% annually until 2030, which will play an important role in asset growth given the strong correlation between these two metrics in the country. Additionally, the savings rate is expected to inch slightly upward by the decade's end, providing a modest but positive boost to total assets as well.
Outlook until 2030
Looking ahead and considering these factors, we forecast annual asset growth of around 13.5% until 2030. This can be broken down into two components:
about 4.0% organic growth from asset performance, reflecting the current asset allocation in Hungarian portfolios,
and approximately 9.5% growth attributed to the convergence factor and increased financialization of the Hungarian economy.
Given these projections, our analysis suggests that Hungary is likely to remain the front runner in asset management within the CEE-region. However, substantive government initiatives to lure in retail investors into the government bond market might cap the asset management industry growth going forward.
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As of October 2024