Hungary’s economy in 2020 declined by an annual 5.1 percent, the Central Statistical Office (KSH) said on Tuesday, based on a first estimate.
GDP grew by 1.1 percent in the fourth quarter last year compared with the previous quarter and fell by 3.7 percent compared with the same period of the previous year.
According to seasonally and calendar-adjusted data, the economy’s performance declined by an annual 4.3 percent in the fourth quarter.
Industry and the IT and communication sectors contributed the most to growth, the KSH said.
Finance Ministry: Hungary outperformed many countries
Finance Minister Mihály Varga said in a video on Facebook that the government was mulling further developments to the tune of “several thousand billion forints”, adding that his ministry was expecting the economy to return to a growth path in the second quarter this year and “produce a two-digit growth” in the period.
Varga noted the economy’s resilience and the government’s economic protection measures, adding that Hungary’s recession of 5.1 percent in 2020 had been smaller than expected, and below the European Union average of 6.4 percent. He also noted that Hungary had outperformed Austria, Belgium, France, Italy, and the Czech Republic.
Analysts: Hungarian economy’s recovery potential better that expected
Analysts polled by MTI hailed the Q4 growth figure, saying that the economy had much greater recovery potential than expected, which foreshadowed a rebound in 2021, the magnitude of which would be determined by the speed at which restrictions were eased.
ING Bank chief analyst Péter Virovácz said the Q4 figure was a “huge surprise, exceeding the most optimistic forecasts”. The 1.1 percent figure was “more dynamic than the full year average”, with a positive impact on 2021 as a whole, he said.
Gábor Regős, head of pro-government Századvég’s macroeconomic division, said the growth was surprising in light of restrictions introduced in November. He said it appeared that most sectors had done as well.
In the featured photo illustration: Finance Minister Mihály Varga. Photo by Tamás Kovács/MTI