KSH: Hungary’s GDP growth accelerates to 3.9% in Q2

Analysis

Hungary's unadjusted GDP accelerated to 3.9% in Q2, from 3.5% in Q1, a first reading of data published today by the Central Statistics Office (KSH) shows. The year-on-year rate exceeded analysts' expectations and was the highest one since the Q1 of 2006, KSH says.

Seasonally – and calendar year -  adjusted GDP was up 3.7% year-on-year and 0.8 % quarter-on-quarter. Growth was boosted by an improved performance of the industrial and construction sectors, KSH departement head Pál Pozsonyi said. KSH published favorable figures for these two sectors yesterday.

Farm sector performance is also shaping up, in spite of a worse than expected grain harvest, and all branches of industry are growing, Pozsonyi added. Infrastructure investments are the driving force in the construction sector but investments in the manufacturing sector are picking up and growth can also be seen in the service sector, with the exception of financial services.

In a statement published on its website, the National Economy Ministry said that GDP growth, which is bigger than expected, could be the result of a faster expansion of market services. It also noted an improvement in the production sectors as well as a pickup in domestic demand.

"Growth dynamic could remain indefinitely high based on gauges of confidence and data on order stocks, thus growth in 2014 will certainly exceed 3%", the ministry added.

Full year GDP growth could indeed exceed 3 %,  Zoltán Török and Gergely Gabler, chief analysts at Raiffeisen Bank and Erste Bank, said to MTI.

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