Hungary GDP

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Hungary: Pace of GDP growth slows down in Q3 on weaker exports

December 3, 2014

In the third quarter of 2014, GDP expanded 3.2% over the same period of last year according to more detailed data released by the Central Statistics Office (KSH) on 3 December, meeting the growth estimate from the preliminary release. The print came in below the 3.9% expansion recorded in the second quarter and marked the slowest expansion since Q4 2013.

The slowdown in the third quarter was driven by a poorer performance of the external sector that more than offset rising public spending. Total consumption fell from Q2’s 2.2% increase to a 1.3% expansion. Private consumption dropped from the 2.1% growth recorded in Q2 to a 1.1% expansion in Q3 while government consumption accelerated from Q2’s 2.5% growth to a 3.0% increase. Fixed investment increased 13.2% in the third quarter (Q2: +18.4% year-on-year).

On the external side of the economy, exports rose 7.9% in the third quarter (Q2: +9.4% yoy) and imports accelerated slightly from Q2’s 10.7% expansion to 11.0% growth in Q3. As a result, the external sector’s net contribution to overall growth deteriorated from minus 1.6 percentage points in Q2 to minus 3.2 percentage points in Q3.

On a quarter-on-quarter basis, GDP increased a seasonally-adjusted 0.5%, which marked a deceleration over the 0.8% expansion recorded in Q2.

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


Author: Teresa Kersting, Economist

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Hungary GDP Q3 2014

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


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