On the production side, services added 5.3 percentage points to first-quarter, year-on-year headline growth, the construction sector 0.6 percentage point and industry 1.2 percentage points.

Output of industry rose by 4.9% during the period, while output of services climbed 9.9% and construction output increased by 18.3%.

Within services, output of the commercial accommodations and catering segment rose by 80.8%, rebounding from the base period when pandemic restrictions still weighed.

On the expenditure side, final consumption contributed 7.7 percentage points to growth, while gross capital formation added 3.0 percentage points.

The trade balance shaved 2.6 percentage points off headline growth. Final consumption increased by 10.6%, while gross capital formation rose by 13.2%.

Equilor Investment senior analyst Zoltán Varga said the fresh data showed government transfers in the form of a tax refund for families raising children, and bonuses for pensioners, the police and the armed forces had supported consumption during the period.

Fiscal adjustments could cause growth to slow in the third quarter as state investments are rescheduled, while higher financing costs could hold back private sector investment, he added.

Magyar Bankholding chief analyst Gergely Suppan said growth could slow in the coming quarters on base effects and the impact of the war in Ukraine.

Among downside risks, he put supply chain interruptions because of the war and sanctions on Russia, the commodities squeeze, higher lending rates and “runaway inflation”, while upside risks include new industrial capacities, an easing of the shortage of semiconductors and other parts, and high order stocks in the industrial and construction sectors.

He put full-year GDP growth close to 6%.

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