Hungarian Parliament building

Hungary GDP Q2 2020

Hungary: Economy records sharpest contraction on record in Q2

According to a preliminary reading released by the Hungarian Central Statistics Office on 14 August, economic activity significantly deteriorated in the second quarter, with GDP dropping 13.6% on an annual basis (Q1: +2.2% yoy). Q2’s reading marked the largest contraction on record, mainly attributed to the coronavirus pandemic and associated restrictive measures. On a seasonally-adjusted quarter-on-quarter basis, economic activity fell 14.5% in Q2 (Q1: -0.4% s.a. qoq).

While a detailed breakdown of the result is yet to be released, available data suggests that coronavirus containment measures led to declining activity across most sectors of the economy, with the services and industrial sectors being the hardest hit.

Commenting on Q2’s contraction, Dan Bucsa, chief CEE economist at UniCredit Bank adds:

“The decline in GDP is correlated with the tightness of lockdowns as measured by the Google mobility data. The laggard is again Hungary, where the structure of the economy, rather than the tightness of restrictions explain the large GDP decline.”

More detailed GDP data will be released on 1 September.

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