Hungary: Economy grows at quickest pace on record in Q2 on low base effect
September 2, 2021
Economic growth bounced back in the second quarter, with GDP increasing 17.9% on an annual basis (Q1: -2.1% year-on-year).
The upturn reflected improvements in private consumption, fixed investment and exports. Household spending increased 9.9% in the second quarter, which contrasted the Q1’s 3.7% contraction. Similarly, fixed investment bounced back, growing 8.3% in Q2 and swinging from the 0.1% contraction logged in the previous quarter. Meanwhile, government consumption dropped 0.5% (Q1: +10.4% yoy).
Exports of goods and services surged 33.0% on an annual basis in the second quarter, which was above the first quarter's 3.3% expansion. In addition, growth in imports of goods and services sped up to 23.4% in Q2 (Q1: +1.1% yoy).
On a seasonally-adjusted quarter-on-quarter basis, economic growth accelerated to 2.7% in Q2, following the previous quarter's 2.0% increase.
Commenting on the release, Peter Virovacz, senior Hungary economist at ING, stated:
“The growth profile of the first half of 2021 tells a story of a resilient and surprisingly flexible economy. However, we need to keep in mind that reopening was just a one-time booster and, while aggregate demand will increase further, its impact will be much more muted than in the second quarter.”