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Analysts mixed on investment outlook after Q2 data

Pharma

Analysts had a mixed outlook for investments in Hungary after fresh data for Q2 published on Wednesday showed a bigger-than-expected drop in investments.

Second-quarter investment volume in Hungary fell 6.5% year-on-year and was down 2.4% quarter on quarter, the Central Statistics Office (KSH) said early Wednesday.

Analysts had forecast a quarter-on-quarter drop of 1-2%.

Gergely Suppan, chief analyst at Takarékbank, said the weak investment data explain lower-than-expected GDP growth in Q2. Big manufacturing sector and telecommunications sector investments started in Q3, which should lift overall investment volume, he added.

European Union-supported infrastructure investments as well as a low base will also support investment volume for the rest of the year, thus the decline has to stop sooner or later, he said.

Raiffeisen Bank's Zoltán Török said the weak investment data came as little surprise after the worse than expected Q2 GDP growth. Apart from "flagship" investments underway in the manufacturing and automotive industries, there is little growth in other areas, he added.

He put gross fixed capital formation down 1-1.5%, year-on-year, in Q3 and Q4, and said it was likely to fall 2% for the full year. In 2012, he projected a drop of about 1% for the full year.

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