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Hungary Growth at 4-Year High

Hungary Growth  at 4-Year HighHungary Growth  at 4-Year High

Hungarian GDP increased by 4.6% year-on-year in 2Q18 according to the preliminary release of the Hungarian Central Statistical Office, ING reported. This counts as a significant upside surprise, despite the fact that market expectations were widely diverse (3.6%-4.8% y-o-y according to Bloomberg). The four-year high y-o-y rate of economic expansion shows acceleration compared to 1Q18, which was rather against the odds based on the high-frequency data such as retail sales and industry. The data is preliminary and the HCSO will publish the details in early September. However, HCSO highlighted that “most branches of the national economy contributed to the growth, market-based services to the greatest degree”. The latter shouldn’t come as a surprise. The positive contribution of agriculture could be one of the big factors here, HSCO said. On the other hand, gross value-added of industry could increase more as the production data suggested because of high wage growth which elevated the share of value added in the total output. On the expenditure side, it is expected that consumption is one of the main drivers, supported by a strong labor market.

 

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