Hungary: Hungarian economy accelerates in Q4
March 8, 2016
Hungary’s economy picked up pace in the fourth quarter of last year, according to more detailed data released by the Central Statistics Office (KSH) on 8 March. GDP growth accelerated from 2.4% over the same period of the previous year in Q3 to 3.2% in the fourth quarter. The print matched the previously reported flash estimate.
The pick-up in growth was driven by a robust performance from the domestic economy. Private consumption recorded the largest gain in almost a decade, expanding 3.2% annually (Q3: +2.5% year-on-year). Continued gains in the labor market and higher real wages have supported household spending. Investment activity also gained steam, supported by final drawdowns on EU development funds. Fixed investment growth tallied 6.5% in Q4, contrasting Q3’s 1.4% contraction. In addition, government consumption accelerated, rising 6.7% (Q3: +5.1% year-on-year).
On the external side of the economy, demand for imports remained strong although growth inched down from an 8.1% in Q3 to 8.0% in Q4. Meanwhile, exports tallied a 7.7% expansion (Q3: +8.6% yoy). Overall, the external sector weighed on economic growth and the net contribution came in at minus 0.3 percentage points, which contrasted the plus 0.3 percentage points tallied last quarter.
On a quarter-on-quarter basis, GDP increased a seasonally-adjusted 1.0%, which was above the 0.6% increase recorded in Q3 and marked the best result since June 2014. For the full year 2015, growth came in at 2.9% (2014: 3.7%).