In the fourth quarter of 2014, contrary to predictions, Hungarian economic growth did not decelerate, latest KSH report shows. Hungary’s GDP growth has become stable and strong, the economy minister said in response to the data released by the Central Statistical Office. Mihály Varga said that last year’s economic expansion – dynamic annual growth of 3.5% – had beat market and government expectations. He added that on the basis of the data for the first quarter this year, the Economy Ministry would decide whether to modify its forecast for this year of 2.5%.
The Economy Ministry predicts that GDP growth has been driven by higher domestic demand and investment. The key factors boosting investment were construction sector rebound, better utilization of EU funding, low interest rates and the general recovery of the private sector, Varga said. Household consumption was fuelled by lower prices, higher wages in real terms due to favourable labour market trends and the outstanding performance of certain services sectors. Muted inflation was the consequence of the steep fall in oil prices and the Government-mandated public utility price cuts.
ING chief analyst András Balatoni said fourth quarter growth was well above his 2.9% estimate and had accelerated in spite of a slowdown in industrial output. Buda-Cash Brókerház analyst Bálint Török also said the market had expected a deceleration of growth because of the high base as well as slacker investments, trade dynamics and industrial output. Hungary’s GDP grew an annual 3.4% in the fourth quarter of last year, accelerating from 3.2% in the previous quarter, a first reading of data released by the Central Statistical Office (KSH) shows. GDP growth for the full year came to 3.5%, based on both adjusted and unadjusted data. The KSH said industry and farming were the engines of growth in the fourth quarter.
via hungarymatters.hu and kormany.hu photo: Zoltán Tuba -origo.hu