Hungary: Recession confirmed in Q3
December 7, 2012
In the third quarter, GDP contracted 1.5% over the same period the year before, according to detailed data released by the Central Statistics Office (KSH) on 7 December. The figure, which matched the preliminary estimate published on 15 November, mirrored the 1.5% contraction recorded in the second quarter and represented the third consecutive drop in output.
Domestic demand remains depressed, mostly reflecting a further deterioration in total consumption, which stepped down from a 1.3% contraction in the second quarter to a 3.2% decline in the third quarter. Private consumption plunged 3.9% in the third quarter (Q2: -1.7% year-on-year), whereas government consumption accelerated to a 1.4% expansion (Q2: +0.8% yoy). Moreover, fixed investment remained mired in the red, albeit moderating the pace of decline, and stepped up from a 4.5% contraction in the second quarter to a 3.6% drop in the third.
On the external side, exports decelerated from a 4.2% increase in the second quarter to a 1.9% expansion in the third. However, imports swung from a 1.5% expansion in the second quarter to a 0.7% contraction. As a result, the net contribution from the external sector to overall growth remained positive but deteriorated slightly from 2.6 percentage points in the second quarter to 2.3 percentage points in the third.
On a quarter-on-quarter basis, GDP decreased a seasonally adjusted 0.2%, which marked an improvement over the 0.4% drop recorded in Q2 but signifies that the Hungarian economy remains mired in recession.