The rate of growth accelerated from 3.3 percent in Q2. KSH said market-based services contributed the most to the growth. The economy grew by an annual 3.7 percent in Q1-Q3.

Economy Minister Mihály Varga noted the impact of the booming construction industry on growth. In a public television interview after the data release, Varga said the automotive industry had also continued to perform well.

He acknowledged the underperformance of the farm sector due to drought but said “we don’t see this as a problem”. The government’s official target for GDP growth this year is 4.1 percent.

Takarékbank analyst Gergely Suppán said growth could pick up in the fourth quarter, raising full-year growth to 4 percent. The consumption dynamic, the wave of home and office construction, increased state investments supported by European Union funding, new automotive industry capacity and manufacturing industry investments could lift GDP growth to 4.2 percent next year, he added.

Erste Bank senior analyst Orsolya Nyeste put full-year GDP growth at 3.7 percent for this year and 3.4 percent for next year. K and H Bank chief analyst Dávid Németh also projected full-year growth at 3.7 percent in 2017, but forecast growth for next year at 3.5pc.

ING‘s head analyst Péter Virovácz said Q4 GDP growth could climb above 4 percent, bringing the figure for the full year to 3.8 percent.

Republished with permission of Hungary Matters, MTI’s daily newsletter.

MTI photo: Koszticsák Szilárd