Hungary GDP Q4 2017

Hungary

Hungary: Economic growth accelerates to over three-year high in Q4

March 7, 2018

According to a second estimate released by the Central Statistics Office (KSH) on 6 March, the Hungarian economy picked up steam in Q4, as GDP expanded 4.4% annually in the quarter, matching the preliminary estimate released a month earlier. The quarterly print marked the fastest expansion since Q2 2014 and an acceleration from Q3’s already strong 3.9% increase. Full-year growth in 2017 came in at 4.0%, a marked acceleration from 2016’s 2.2% expansion and the strongest growth since 2014.

Domestic demand was the main driver of growth in the fourth quarter. Private consumption expanded a sharp 5.2% in Q4, an acceleration from Q3’s 4.8% increase and the fastest print in three and a half years. It has benefitted from salary hikes, low inflation and declining unemployment, which reached 3.8% in the fourth quarter. Growth in fixed investment moderated but remained robust (Q4: +13.1% year-on-year; Q3: +14.4% yoy). The double-digit increases in fixed investment was mostly driven by the resumption of EU investment funds last year, which brought full-year growth in fixed investment to 16.8% (2016: -10.6%). Accommodative monetary policy and high business confidence also provided a notable boost to fixed investment. Public consumption grew 8.8% in Q4 (Q3: +1.8% yoy), on higher spending on infrastructure and social transfers.

Looking at the external sector, exports grew 8.3% in the fourth quarter, a pick-up from the previous quarter’s 4.7% rise. The acceleration was propelled by increased demand for manufactured goods including motor vehicles and assembled automotive parts. Demand was particularly strong from the European Union. Imports also accelerated and reached 9.7% in Q4 (Q3: +9.1% yoy), reflecting solid domestic demand and capital inflows into the economy. As imports expanded at a faster pace than exports, the external sector made a negative contribution to growth in the fourth quarter.

The economy is set to grow at a solid, albeit slower, pace in the next two years. The domestic economy is expected to remain robust as unemployment stays low, monetary conditions remain accommodative and EU investment funds continue to flow into the economy. Similarly, the external sector should benefit from the Eurozone’s current growth dynamics and increased production capacity in the country’s manufacturing sector.

Hungary GDP Forecast


FocusEconomics Consensus Forecast panelists expect the economy to expand 3.2% in 2018, which is up 0.1 percentage points from last month’s projection. For 2019, the panel expects growth of 3.1%.


Author: Jean-Philippe Pourcelot, Economist

Sample Report

Looking for forecasts related to GDP in Hungary? Download a sample report now.

Download

Hungary GDP Chart


Hungary GDP Q4 2017 0

Note: Year-on-year changes of working-day adjusted GDP in %.
Source: Hungarian Central Statistics Office and FocusEconomics Consensus Forecast.


Hungary Economic News

  • Hungary: Central Bank leaves the base rate unchanged in May

    May 22, 2018

    At its latest monthly monetary policy meeting held on 22 May, the Monetary Council of the Hungarian National Bank (MNB) decided to keep the base rate at its current record low of 0.90%, while also maintaining all other monetary policy instruments unchanged.

    Read more

  • Hungary: The economy continues to grow unabated in Q1

    May 15, 2018

    The Hungarian economy continued to expand robustly in the first quarter.

    Read more

  • Hungary: Industrial output slows in March on the back of soft manufacturing

    May 14, 2018

    According to preliminary data released by the Hungarian Central Statistical Office (KSH) on 14 May, industrial output rose a working-day adjusted 1.9% year-on-year in March, coming in well below the 4.1% increase recorded in February. March’s softer output was driven by moderations in the manufacturing and mining sectors.

    Read more

  • Hungary: Inflation inches up in April

    May 9, 2018

    Consumer prices jumped 0.7% month-on-month in April, coming in well above the 0.1% increase observed in March.

    Read more

  • Hungary: Industrial output growth eases further in March

    May 9, 2018

    According to preliminary data released by the Hungarian Central Statistical Office (KSH) on 8 May, industrial output rose a working-day adjusted 1.9% year-on-year in March, coming in well below the 4.1% increase observed in February. In month-on-month seasonally- and working-day adjusted terms, industrial production contracted 0.7%, contrasting the 0.6% increase in February. Lastly, annual average growth in industrial production moderated further from February’s 5.7% to 5.0% in March.

    Read more

More news

Search form