Hungary GDP Q3 2021


Hungary: GDP growth moderates in Q3 on less favorable base effect

December 1, 2021

A second release confirmed that GDP growth moderated to 6.1% year-on-year in the third quarter, from 17.8% in the second quarter.

The slowdown was driven by weakening private consumption, fixed investment and export growth. Private consumption growth moderated to 5.0% year-on-year in Q3 following the 8.3% expansion logged in Q2, while fixed investment growth slowed to 9.6% in Q3 from 11.7% in the previous quarter. Government consumption, meanwhile, sped up to a 5.0% increase in Q3 (Q2: +0.6% yoy).

On the external front, growth in exports of goods and services fell to 1.4% in Q3, marking the worst reading since Q3 2020 (Q2: +34.2% yoy). In addition, growth in imports of goods and services moderated to 5.6% in Q3 (Q2: +24.3% yoy).

On a seasonally-adjusted quarter-on-quarter basis, economic growth waned notably to 0.7% in Q3, following the previous period's 2.0% expansion. Q3's reading marked the slowest growth since Q2 2020.

Commenting on the detailed national accounts release for Q3, as well as the short-term outlook, Peter Virovacz, senior Hungary economist at ING, said:

“The details of the Q3 2021 GDP growth clearly demonstrate that Hungarian economic activity is fragile because the growth is pretty one-sided. The new wave of Covid and its new variant pose a significant downside risk to GDP in the coming quarters. […] What we have also learned, is that in the absence of the 8.0% of GDP fiscal support during the fourth quarter of this year and the first quarter of next year, Hungarian economic growth will slow down significantly. But because of the fiscal impulse, we see consumption and investment activity picking up in Q4 2021, translating into accelerating GDP growth. With that, we still see the 2021 average GDP growth at 7.0%, but downside risks are clearly mounting.”


FocusEconomics Consensus Forecast panelists project GDP to expand 4.9% in 2022, which is unchanged from last month’s projection. For 2023, the panel sees GDP growth at 3.7%.

Author: Massimo Bassetti, Senior Economist

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