Hungary: GDP expands at fastest rate in over two years
December 5, 2013
In the third quarter of 2013, GDP expanded 1.8% over the same period of the previous year according to more detailed data released by the Central Statistics Office (KSH) on 4 December. The figure met the growth estimated in the preliminary release and significantly overshot the 0.5% expansion recorded in the second quarter. In addition, the figure marks the fastest expansion since Q1 2011.
The improvement in the third quarter was mainly driven by an acceleration in fixed investment (Q2: +5.4% year-on-year; Q3: +8.2% yoy). Private consumption recorded flat growth in Q3, which was slight improvement over the 0.1% contraction recorded in the previous quarter. Government consumption decelerated from 5.5% growth in Q2 to a 4.4% increase in Q3.
On the external side of the economy, exports rose 6.0% in the third quarter (Q2: +3.5% yoy) and imports expanded 5.8% (Q2: +5.5% yoy). As a result, the external sector's net contribution to overall growth improved from minus 2.0 percentage points in Q2 to plus 0.4 percentage points in Q3.
On a quarter-on-quarter basis, GDP increased a seasonally-adjusted 0.9% (previously reported: +0.8% quarter-on-quarter), which is an improvement over the 0.4% expansion recorded in Q2.
The Central Bank expects the economy to expand 1.7% in 2014 and 2.2% in 2015. FocusEconomics Consensus Forecast panelists expect a 1.7% 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