Hungary GDP

Hungary

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.

The Central Bank expects the economy to expand 2.3% in 2015 and 2.1% in 2016. FocusEconomics Consensus Forecast panelists expect a 2.5% expansion in 2015, which is unchanged from last month’s projection. For 2016, the panel expects growth to expand 2.4%.


Author: Teresa Kersting, Economist

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Hungary GDP Q1 2015

Note: Year-on-year changes of working-day adjusted GDP in %.
Source: Hungarian Central Statistics Office and FocusEconomics Consensus Forecast.


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