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Economy Expands 6.5% in Hungary During Q2

• 18 Aug 2022 11:09 AM
• Hungary Matters

Hungary's GDP grew by an annual 6.5% in the second quarter, the Central Statistical Office (KSH) said in a first reading of data released on Wednesday.

KSH said all branches of the national economy contributed to headline growth, with the exception of the farm sector.

Growth was supported especially by industry, particularly food and drink production and electrical equipment manufacturing, and by market services, notably commercial accommodations and catering, and logistics services, it added.

Quarterly growth slowed from 8.2% in Q1, KSH noted. Adjusted for seasonal and calendar year effects, Q2 GDP growth was level with the unadjusted figure. In a quarter-on-quarter comparison, adjusted GDP rose by 1.1%. First-half GDP growth climbed by an annual 7.3%.

Commenting on the data, Finance Minister Mihály Varga said all branches of the economy contributed to Q2 growth, with the exception of agriculture, which was hit by the drought. Industry, trade, tourism, the financial sector and the ICT sector, too, performed well, he said on Facebook.

Varga said the foundation for the performance of the Hungarian economy was work, noting that the number of employed exceeds 4.7 million, while the jobless rate is at a record low of near 3%.

Analysts: Hungary Q2 GDP Growth Exceeds Expectations

Commenting on the Central Statistical Office’s second-quarter growth report, Gergely Suppan, chief analyst at Magyar Bankholding, said Q2 GDP growth beat expectations and was among the highest in the European Union.

Magyar Bankholding could bump up its forecast for 5.7% full-year growth, he added, while acknowledging an expected slowdown in the coming quarters because of base effects and the impact of the war in Ukraine.

János Nagy, Erste Bank’s macro analyst, said monthly industrial output data already showed the resilience of Hungarian manufacturers as supply chain tensions continued, while higher wages and fiscal transfers boosted domestic consumption, supporting the performance of services.

Erste puts full-year GDP growth at 5.5%, he added.

Ful report available here.

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