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Stats Office: Hungary’s GDP Grew By Annual 2.6% In Second Quarter Of 2016

Tamás Székely 2016.09.07.

Hungary’s economy grew by an annual 2.6% in the second quarter, up from 1.1% in the first quarter, the Central Statistical Office (KSH) confirmed in a second reading of data. KSH revised Q1 upward by two-tenths of a percentage point on the back of better farm sector output. It attributed the improved growth rate in Q2 to better performance in market services, industry and the farming sector. Adjusted for seasonal and calendar year effects, the annual Q2 growth rate was 1.8%, while the quarter-on-quarter rate was 1%.

ING Bank chief analyst Péter Virovácz said he was standing by his forecast for full-year growth of 2.2%, in spite of increased chances for an even higher rate. For growth to reach the 2.5-3% rate projected by the economy ministry and the National Bank of Hungary (MNB), a pickup in investments will be necessary. Erste Bank senior analyst Gergely Ürmössy raised his projection for full-year growth from 2.0% to 2.1% after the release of the data.

The Central Statistical Office (KSH) also reported that the Hungarian industrial output fell by an annual 4.7% in July in a first reading of data. Adjusted for the number of workdays – of which there were two more in the base period – output edged down just 0.1%. In January-July, industrial output in Hungary grew by 1.3% year on year. In a month-on-month comparison, output fell a seasonally and workingday-adjusted 0.4%. Analysts polled by MTI said the figure surprised on the downside but that industrial output could regain momentum in the next few months.

ING Bank’s Péter Virovácz said that July’s lower than expected output figure was no cause for concern. He said that industrial growth could still reach 4% on the back of a recovery in the autumn. Takarékbank’s Gergely Suppan said the lower figure was partly down to the calendar effect since July this year was 2 working days shorter than the same month in 2015, and partly due to “shifting trends in car manufacture”. K and H Bank’s Dávid Németh argued for a lower growth figure for the whole year, noting that out of seven months this year, five had witnessed shrinking output. ING Bank expects industry to grow by 4% this year, while Takarékbank and K and H Bank both put the figure between 2-3%.

via ksh.hu and hungarymatters.hu