Hungary: GDP expands at fastest pace in seven years in Q4, rebounds in 2013
March 5, 2014
In the fourth quarter, GDP expanded 2.7% over the same period of the previous year according to more detailed data released by the Hungarian Central Statistics Office (KSH) on 5 March. The reading marked the fastest growth rate in seven years. In addition, the figure was in line with the preliminary estimate and overshot the 1.8% expansion recorded in the third quarter. In the full year 2013, the economy expanded 1.1%, which contrasted the 1.7% contraction recorded in 2012. Q4's expansion was mainly the result of an improvement in both domestic and external demand. Private consumption expanded 0.5% over the same period of the previous year, which contrasted the 0.1% fall recorded in Q3. In addition, government consumption improved from a 1.6% rise in Q3 to a 5.7% increase in Q4. Fixed investment rose 10.4%, which was up from the 8.3% increase observed in Q3. On the external side of the economy, exports increased 8.8% over the same quarter last year (Q3: +6.4% year-on-year), while imports rose 7.6% (Q3: +5.8% yoy). As a result, the external sector's net contribution to overall economic growth rose from 0.8 percentage points in Q3 to 1.2 percentage points in Q4. On a quarter-on-quarter basis, GDP expanded a seasonally-adjusted 0.5%, which undershot both the previously-estimated 0.6% rise and the 0.8% increase observed in the previous quarter. The Central Bank expects the economy to expand 2.1% in 2014 and 2.4% in 2015. FocusEconomics Consensus Forecast panelists forecast a 1.8% expansion in 2014, which is unchanged from last month's projection. For 2015, the panel expects growth to accelerate to 1.9%.
Author: Dirina Mançellari, Senior Economist