Hungary: Economic growth continues to accelerate in Q2
The Hungarian economy continued to expand robustly in the second quarter. According to preliminary data released by the Central Statistics Office (KSH) on 14 August, economic growth in Q2 came in at 4.6% year-on-year, above Q1’s 4.4% expansion and the highest reading since Q2 2014.
Buoyant household spending likely drove growth: Retail sales expanded at a strong pace throughout the quarter, underpinned by upbeat consumer confidence; tightening labor market conditions; and rising, but manageable, inflation. Moreover, soaring business confidence suggests fixed investment also expanded solidly, benefiting from increased EU funds. That said, industrial production growth slowed significantly from the previous quarter, partly due to the temporary cooling in the industrial sector seen throughout the EU.
On a quarter-on-quarter, seasonally- and calendar-adjusted basis, GDP growth decelerated from 1.2% in Q1 to 0.9% in Q2, the weakest reading in nearly two years.
More detailed data will be released on 5 September.