The macroeconomic impacts of demographic changes in Hungary in the context of the European Union

The article provides a review of Hungarian and international demographic trends and examines the macroeconomic impacts of demographic developments in Hungary in comparison with the European Union. Based on available population projections, it is expected that ageing will also characterise Hungarian demographic processes, but the extent of ageing in Hungary may be more moderate than the estimated impact in several regional and Western European countries. According to the population projections and estimations found in the literature, we came to the conclusion that in the long run population ageing is expected to substantially change labour supply, consumption, and savings ratios, dampen growth prospects and potentially exert a disinflationary impact in the upcoming decades. Demographic processes may affect developments in key variables relevant for the conduct of monetary policy and the effectiveness of transmission channels. In addition, population ageing may increase budgetary expenditures through the pension and the healthcare system. The adverse impacts may be mitigated by economic policy measures and adjustment by economic agents. At the same time, demographic processes may also represent an economic opportunity that can be exploited through the adequate reallocation of resources.