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Economic growth up 5% in fourth quarter of 2018

The gross domestic product of Hungary was up by 5.0% according to raw data, and by 4.8% according to seasonally and calendar-adjusted and reconciled data in the fourth quarter of 2018, compared to Q4 2017, according to a flash estimate released Thursday by the Central Statistical Office (KSH). Full-year growth is estimated at 4.8%.

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Most industries contributed to the growth, market-based services to the greatest extent, noted the KSH. Growth accelerated from 4.9% in both Q3 and Q2, and 4.5% in Q1.

In a quarter-on-quarter comparison, GDP was up a seasonally and calendar year-adjusted 1.1% in the fourth quarter.

The Q4 rate was well over the 4.5% estimate by analysts polled by business daily Világgazdaság, noted state news wire MTI.

Commenting on the fresh data in a statement released by his ministry, Minister of Finance Mihály Varga said the big contribution of services to GDP growth last year was supported by a six-year agreement on minimum wage rises, paired with payroll tax cuts the government agreed earlier with employers and unions.

The construction sector, boosted by government measures supporting home building, lifted the production branches of the national economy, he added. 

Varga warned that the global economy and the region face "political and economic uncertainty," noting that the European Commission recently lowered its projection for economic growth in the EU.

"In the interest of maintaining the high rate of growth in Hungary and keeping it at least two percentage points over the EU average, the government is helping improve competitiveness with a number of measures and is working on an action plan to defend the economy," he stated.

A second, more detailed estimate of GDP in Q4 2018 will be published by the KSH on March 1.