Hungary: Economy rebounds strongly in Q3
According to a preliminary reading released by the Hungarian Central Statistics Office on 13 November, economic activity rebounded strongly in the third quarter, with GDP jumping 11.3% on a seasonally-adjusted quarter-on-quarter basis. This marked the strongest expansion on record and contrasted the previous quarter’s historic 14.6% plunge, which was due to the coronavirus pandemic and associated restrictive measures. On an annual basis, the pace of contraction eased considerably from 13.6% in Q2 to 4.6% in Q3.
While a detailed breakdown of the result is yet to be released, available data suggests that the easing of coronavirus containment measures led to strengthening activity across most sectors of the economy. A much softer contraction in industrial output and merchandise exports, coupled with less downbeat business sentiment, hints at recovering private sector activity. Moreover, less negative retail sales readings, increasing consumer sentiment and a decline in the unemployment rate point to resurging household spending.
More detailed GDP data will be released on 1 December.
Next year, GDP is seen recovering from the pandemic’s fallout as private spending rebounds, external demand returns on the back of a reopening of the global economy and inflows of EU funding provide further support. That said, the unpredictable evolution of the pandemic poses a downside risk to the outlook.