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Investment Volume Growth Breaks 17-Year Record Despite Q4 Slowdown

By Tamás Székely // 2015.02.26.

The volume of investment in Hungary saw the largest increase in 17 years, the Central Statistical Office (KSH) latest data shows. Although the investment volume growth slowed to an annual 1.9% in the fourth quarter of 2014, year-on-year it rose by 14% and reached 5,216 billion forints. In 2014 construction investments rose by an annual 8.6% and came to 2,628.6 billion forints. Investments in machinery, equipment and vehicles jumped 23.9%, reaching 2,517.8 billion forints in 2014.  As for the fourth quarter of 2014, the construction investments fell by 7.6% and came to 960.6 billion forints at current prices, while investments in machinery, equipment and vehicles rose by 6.9% and added up to 805.2 billion forints.

According to the Economy Ministry, the key factors behind the broad-based investment growth registered in several sectors of the national economy are the continuing manufacturing sector orders, the successful utilization of EU funding, projects realized through the assistance of the Central Bank’s ‘Funding for Growth Scheme’ and the low interest rates. The higher production capacity created by investment projects is adding to the performance of productive sectors which in turn secure economic growth in the near future, the Minsitry said in response to the data.

Meanwhile retail sales in Hungary also rose by an annual 5.6% in December, according to KSH’s calendar year adjusted data. The calendar year adjusted retail sales growth accelerated from 5.1% in the previous month, while retail food sales rose by 3%, the adjusted figures show. Non-food sales rose by 7.4% and vehicle-fuel sales increased by 10.8%. The Economy Ministry said it expected the positive trend to stay unbroken in the coming months, as the compensation of bank clients and the phasing out of forex loans will provide additional impetus to the sector’s expansion.

via ksh.hu, hungarymatters.hu and kormany.hu photo: public domain