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The modest growth was fueled primarily by services, particularly information and communication, as well as arts, recreation and food services, while industry and agriculture dragged down overall performance.
Construction added support with a 4.3% year-over-year gain, but industry shrank 3.3% and agriculture contracted 11.4%. Manufacturing fell 4.4%, driven by declines in fabricated metal products, though transport equipment manufacturing cushioned the downturn.
Services as a whole rose 1.3%, led by a 6.5% jump in arts and recreation, 6.3% growth in information and communication, and a 3.2% increase in accommodation and food services. Financial and insurance activities expanded 2.2%, while wholesale and retail trade gained 1.8%. Public administration and real estate saw slight contractions.
On the demand side, household consumption remained the strongest driver, with final consumption expenditure up 5% year-over-year. Overall final consumption grew 5.3%, supported by a 9.8% surge in government spending. Durable goods purchases rose 6.2%, while non-durables and services advanced 5.6% and 4.6%, respectively.
By contrast, gross fixed capital formation dropped 7% as both construction and machinery investment slowed, pulling down overall capital formation by 0.9%. Domestic use still grew 3.8% thanks to consumption.
External trade was a drag on growth. Hungary posted a surplus of HUF 1.183 trillion at current prices, but exports fell 0.9% while imports jumped 4%. Goods exports, which account for about 80% of trade, declined 1.3%, while imports surged 5.9%. Services trade offered a partial offset, with exports up 0.7% and imports down 4.6%. Net trade subtracted 3.4 percentage points from GDP growth.
Quarter-on-quarter data showed a 0.6% rebound in both industry and services, alongside a 6.0% rise in construction. Agriculture shrank 6.0% over the same period. Household consumption rose 1.4% from the previous quarter, while investment fell 1.9%. Imports climbed 3.1% and exports dipped 0.4%.
For the first half of 2025, GDP was flat on raw data and 0.1% lower on adjusted terms compared with the same period last year, reflecting the fragile balance between resilient domestic demand and weak external trade.
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