Hungary: Economic growth moderates in Q2
According to a preliminary reading, economic growth decelerated to 1.1% on a seasonally-adjusted quarter-on-quarter basis in the second quarter, following Q1’s 2.1% increase. On an annual basis, the pace of expansion slowed to 6.5% in Q2, from 8.2% in Q1.
While a detailed breakdown is set to be released on 1 September, the press release highlighted that activity in the market services sector and in industry were the main drivers of the sequential expansion.
János Nagy, analyst at Erste Bank, signaled downside risks to growth ahead:
“Due to the recently announced fiscal measures, surging energy prices affect households even more and more in the upcoming periods. Besides, raw material prices coupled with remaining supply chain tensions overshadow the outlook for industrial exports. At the same time, growth of investments is to slow, due more uncertain business outlook, higher interest rate environment and looming fiscal consolidation.”