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Investments in Hungary stall in 2016

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The volume of investments in the national economy was 24% lower in Q4 2016 than a year before, while Hungaryʼs investment performance dropped by 20% over the whole year, according to the Central Statistical Office (KSH). Online news portal index.hu noted that such a drop has not been measured since the change of political system in Hungary.

The drop is spectacular because the figure in the base period (Q4 2015) was high due to the Hungarian government spending a lot from the budget, index.hu explained. The fall was consistent with the change of EU budget cycles, the KSH noted in a first release of data published this morning. 

The volume of investments decreased in the majority of sectors, although growth was recorded in areas less affected by EU funding, so that investments grew by 7.0% in manufacturing, and by 10.0% in wholesale and retail trade, and in repair of motor vehicles and motorcycles at an annual level, the KSH added.

As far as the last quarter is concerned, the volume of investments in machinery and equipment dropped by 18% and that of construction investments by 30%, according to KSH data.

With the completion of developments realized from EU sources at the end of 2015, investments decreased substantially in human health and social work activities (86%), in public administration and defense and compulsory social security (56%), and in education (58%), the KSH said.

The volume of investments in transportation and storage was down by 31%, which was influenced among other things by lower development funds related to urban public transport and to railway transport, the KSH added.

In the whole year of 2016, the volume of investments in the national economy decreased by 20%, within which investments in machinery and equipment fell by 6.6% and construction investments by 32%, according to the KSH.

Investment performance shrank by 8.9% in the case of enterprises employing at least 50 persons, representing nearly six-tenths of investments, and by 63% in the case of budgetary units and entities, the KSH added.

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