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Drop in Q4 investment data slightly bigger than expected

Sustainability

Investment volume fell 4.5% in Q4 from the same period a year earlier, the Central Statistics Office (KSH) said early Wednesday. Investments declined at the same rate for the full year. In Q2 2011 the annual drop was 6.2%. The average decrease in 2011 was also 4.5%, KSH said. Investment volume dropped yr/yr now for the 16th quarter in a row.

TakarékBank analyst Gergely Suppán said the data showed real estate and infrastructure investments weighed, while capacity expansion in the manufacturing and vehicle industries continued at a fast pace. He said the decline in investments could stop around the middle of the 2012, but he still put full-year investment volume down 0.5-1%. He added that low lending activity would not help the situation.

Mariann Trippon from the CIB Bank also said that the tight lending market, the stagnating economy and the uncertain outlook for Hungary's export markets would cause investment volume to stagnate or fall – albeit at a slower pace than last year – in 2012. She added that investment volume data for 2012 would be supported by a low base.

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