Hungary GDP Q2 2019


Hungary: Economy grows at slowest pace in a year in Q2

August 14, 2019

Economic growth decelerated to 4.9% year-on-year in the second quarter, from Q1’s 5.3% expansion, according to a preliminary estimate released by the Hungarian Central Statistical Office (KSH) on 14 August. If confirmed, this would mark the weakest acceleration since Q2 2018.

While a detailed breakdown of the result has yet to be released, available data for the second quarter revealed a slowdown in the industrial, construction, and retail sectors. External headwinds weighed on manufacturing activity and export performance in the quarter amid a downturn in Germany and other key trading partners in the EU. Moreover, a loss of steam in the construction sector suggests fixed investment growth slid amid tumbling business confidence. Despite employment gains, a softer upturn in retail sales growth indicates private consumption also decelerated in the quarter, likely owing to a combination of rising inflation weighing on households’ purchasing power and downbeat consumer confidence.

In quarter-on-quarter, seasonally- and calendar-adjusted terms, growth fell to 1.1% in Q2 from 1.4% in Q1.

Growth is seen weakening this year, as fixed investment loses strength on reduced absorption of EU funds. That said, a pick-up in exports, a rebound in government spending and solid private consumption, supported by a tight labor market and rising wages, should keep the economy growing robustly.

More detailed data will be released on 30 August.

FocusEconomics Consensus Forecast panelists expect the economy to expand 4.2% in 2019, which is up 0.1 percentage points from last month’s projection. For 2020, the panel sees growth decelerating to 2.9%.

Author:, Economist

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Hungary GDP Chart

Hungary GDP Q2  2019

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

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