Hungary: Growth nears two-decade high in Q1
May 31, 2019
First-quarter growth clocked in at the fastest pace in nearly two decades, according to Hungary’s Statistical Office on 31 May. Moreover, the economy defied analysts’ expectations of an obvious slowdown; it grew at 5.3% year-on-year in the first quarter (Q4 2018: +5.1% year-on-year).
Fixed investment fueled domestic demand at the outset of the year amid capacity constraints in the manufacturing sector and a European Union-funded construction boom, expanding 23.4% year-on-year (Q4 2018: +17.2% yoy). Household spending, meanwhile, was upbeat on low unemployment and higher wages, rising 4.8% (Q4 2018: +4.3% yoy). For its part, government spending rebounded (Q1: +2.1% yoy; Q4 2018: -7.0% yoy).
The external sector fared better, too. Export growth picked up to 7.7% year-on-year despite a shakier EU (Q4 2018: +5.6% yoy), while import growth moderated to 6.7% (Q4 2018: +8.2% yoy). Taken together, foreign trade added 1.3 percentage points to growth in the first quarter (Q4 2018: subtracted 1.7 percentage points).
Author: Christopher Thomas, Economist