Hungary: Economy rebounds after five consecutive contractions
September 4, 2013
In the second quarter, GDP expanded 0.5% over the same period last year, according to detailed data released by the Central Statistics Office (KSH) on 4 September. The figure, which matched the preliminary estimate published on 14 August, contrasted the 0.9% contraction recorded in the first quarter and represented the first increase after five consecutive periods of decline in economic activity.
The rebound in Q2 was due to domestic demand, while the external sector's contribution deteriorated compared to the previous quarter. Private consumption rose 0.3% in the second quarter (Q1: -1.1% year-on-year) and government spending expanded 0.6% (Q1: -2.3% yoy). In addition, fixed investment rose 4.9%, contrasting the 6.0% drop seen in Q1.
On the external side of the economy, exports rose 3.0% in the second quarter (Q1: 1.1% yoy) and imports expanded 4.7% (Q1: 0.4% yoy). As a result of stronger imports, the net contribution from the external sector to overall growth swung from plus 0.7 percentage points in Q1 to minus 1.7 percentage points in Q2.
On a quarter-on-quarter basis, GDP increased a seasonally-adjusted 0.1%, which marks a deterioration over the 0.6% expansion recorded in Q1.
The Central Bank expects the economy to expand 0.5% this year. For 2014, the Bank expects the economy to expand 1.5%. FocusEconomics Consensus Forecast panelists expect a 0.4% expansion, which is up 0.1 percentage points from last month's projection. For next year, the panel expects growth to accelerate to 1.4%.
Author: Armando Ciccarelli, Head of Data Solutions