Without adjustments, GDP fell 0.8pc.

In a quarter-on-quarter comparison, GDP dropped a seasonally- and calendar year-adjusted 0.7pc.

Output of the farm, industrial and construction sectors contributed around two percentage points to the year-on-year decline, KSH said. Both market and non-market services mitigated the decline, it added.

In Q1-Q3, GDP rose an unadjusted 0.6pc and an adjusted 0.7pc.

KSH will publish a second reading of the data on December 3.

Commenting on the fresh data, National Economy Minister Marton Nagy noted that the government had earlier pointed to a weak economic performance in the third quarter on the back of declines in the industrial, construction and farm sectors.

He highlighted the impact on the headline figure of the weaker industrial sector, dragged down by the protracted crisis in the German economy, where the poor performance of the automotive industry has a strong effect on Hungary's vehicle and battery industry. The favourable performance of the logistics, tourism, ICT and financial sectors mitigated the decline, he added.

He said Hungary had moved past a difficult period, adding that positive signs in employment, wage, inflation, retail sales, tourism, home sales and commercial real estate lending data indicated the start of an economic turnaround.

Big investments in the pipeline by companies such as CATL, BYD, BMW, SEMCORP and EcoPro will give new impetus to the Hungarian economy, he added.

He said the impact of growing domestic consumption would increase, even as the German economy remained sluggish.

The government aims to boost GDP growth over 3pc in 2025 by adopting a policy of economic neutrality and rolling out 21 measures in its New Economic Policy Action Plan, he added.

Credit for young blue-collar workers, a minimum wage rise and higher tax preferences for families with children will boost purchasing power, supporting a pickup in consumption, he said. Measures to support affordable housing could boost output of the construction industry, while the Demjan Sandor Programme to scale up SMEs will improve local businesses' productivity and lift investments, he added.

Nagy said a marked improvement in economic output could be seen in Q3 2025, adding that an uptick in the German economy could support an even faster recovery.

Hungary needs to strengthen its economic ties with the East in the interest of diversification and reducing its exposure to the performance of the German economy, he added.

Gulyas: Fresh data justify need for new economic policy

Macroeconomic data for the whole year, including the latest GDP data, show the need for a new economic policy, Gergely Gulyas, the head of the Prime Minister's Office, said at a weekly press briefing on Wednesday.

Gulyas said the government's policy of economic neutrality would weaken or even cease dependencies that influence Hungary's economic growth. He added that real wage growth would reach 9-10pc this year.

Gulyas said the cabinet had decided on the support and conditions for a home renovation programme in settlements with populations under 5,000.

Families with children in those settlements may apply for subsidies of at most HUF 3m to cover up to half of the cost of home renovation. They may also apply for another HUF 3m of subsidised mortgage credit.

Source: 
MTI - The Hungarian News Agency, founded in 1881.

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