Household spending boosts Hungaryʼs GDP growth in 2015

Analysis

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Hungaryʼs GDP grew 2.9% in 2015, and household spending was the largest single factor behind the increase, data published by the Central Statistical Office (KSH) yesterday show, according to Hungarian news agency MTI.

Personal consumption spending contributed 1.5 percentage points to last yearʼs growth, the largest contribution since 2003. The growth impact coming from investments dropped to just 0.4 of a percentage point from an outstanding 3.9 percentage points in 2014. Net exports added 1 percentage point to the 2015 pace after reducing it in 2014.

GDP growth slowed to an unadjusted and workday-adjusted 2.9% from an unadjusted 3.7% and a workday-adjusted 3.6% increase in 2014.

GDP was driven by continued rapid growth in manufacturing and, to a lesser extent, in some areas of services. GDP was up 6.3% in industry and rose 7.1% in the manufacturing sector, at a slightly faster pace than in the previous year.

GDP in construction was up 2.9% last year after a 12.3% expansion in 2014.

GDP in agriculture contracted 12.9% after a 13.9% rise in 2014. 

Gross value add rose 2.8% in services, driven by commerce, where growth picked up to 5.7%, and by infocommunications, which expanded 2.9%. Gross value add in the financial sector contracted for the tenth year in a row, although the decrease slowed to just 0.2%. The real estate branch, which includes home construction, expanded 1.1% after a slight contraction in 2014. Among branches with relatively small weights, scientific activities showed growth of over 5% for the third year in a row, while GDP growth in arts and culture slowed to a still strong 6%.

GDP produced by public administration and defense rose 0.6% last year after a 3.8% drop in 2014. 

KSH gave no detailed data on health, social care, education or utilities.

On the utilization side, household consumption spending rose 3.1%, faster than in any year since 2003, while public consumption and investments rose only moderately, by 0.6% and 1.9%, respectively, after big increases in 2014.

Final consumption rose 2.3% in 2014, the most in ten years, while the growth of domestic utilization slowed to 1.9% from 4.2% in 2014, pushed up by the rise in investments.

Foreign trade continued to expand at a rapid rate with export growth accelerating to 8.4%, while import growth slowed to 7.8%. 

Net exports again contributed to GDP growth last year, making 2014 an exception. 

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