Hungary: GDP picks up in Q1 on strong external sector
June 5, 2015
In Q1, GDP expanded 3.5% over the same period last year, according to more detailed data released by the Central Statistics Office (KSH) on 5 June. The print came in marginally above both the 3.4% expansion from the preliminary release and the 3.3% increase recorded in Q4 (previously reported: +3.4% year-on-year). As a result, the economy in Q1 expanded at the fastest pace in three quarters.
The slight improvement in Q1 was driven by a better performance of the external sector and also by rising private consumption. Growth in total consumption moderated sharply to 1.5% (Q4: +2.4% yoy) as a result of an outright contraction in government spending (Q4: +5.7% yoy; Q1: -5.4% yoy). Conversely, the pace of expansion in private consumption picked up to a nine-year high in Q1, jumping from 1.9% in Q4 to 2.6%. Fixed investment deteriorated markedly from Q4’s 1.9% expansion to Q1’s 6.7% drop.
On the external side of the economy, exports rose 10.3% in Q1 (Q4: +9.4% yoy), while import growth decelerated from Q4’s 9.4% to 7.8% in Q1. As a result, the external sector’s net contribution to overall growth rose from 0.1 percentage points in Q4 to 2.5 percentage points in Q1.
On a quarter-on-quarter basis, GDP increased a seasonally-adjusted 0.8%, which matched the result tallied in Q4.