Quarter on quarter, GDP edged down a seasonally and calendar year-adjusted 0.2%.

KSH said GDP was boosted the most by the construction sector and real estate transactions, as well as by the balance of product taxes and subsidies.

Commenting on the data, Mihály Varga, the finance minister, said that the Hungarian economy continued to expand, and “growth prospects give cause for optimism”.

In a video posted on Facebook, he said fresh data were positive despite “unfavourable external conditions” such as the war in Ukraine and economic malaise in the country’s main export markets in Europe, which, he said, was a drag on industrial output.

The finance minister noted recent government measures to consolidate the budget.

“An additional 1,000 billion forints (EUR 2.5bn) in the budget has increased room for manoueuvre, so the growth outlook is getting more stable despite external difficulties,” Varga said.

Meanwhile, thanks to a successful campaign to curb inflation and hike pay, real wages have increased by 10% on average, he said.

An uptick in consumption reflects increasing confidence in the economic outlook, coupled with economic growth projections by the IMF and European Commission putting Hungary among next year’s frontrunners.

International credit rating agencies have also affirmed Hungary’s growth outlook, Varga said, adding that the government will carry on working to maintain fiscal balance while keeping the economy on a growth path.

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Econmin: 'Peace Budget' Needed to Restart Economy

Economic growth was lower than expected in the second quarter, resulting from external factors bearing down on industry experiencing a bout of weak exports, the national economy minister said, adding that Hungarian economy’s foundations were stable, however.

Commenting on data for the second quarter, Márton Nagy said he expected that after the US presidential elections this autumn the government would be able to submit a “peace budget” to parliament, giving a push to the economy with the help of an action plan targeting SMEs and families, which would help to generate 4% growth in gross domestic product next year.

He said this would be achieved inclusively by strengthening the middle class and enabling increasingly broad layers of society to benefit from the economic boom to be brought about by the return of peace.

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