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GDP up 5.1% in Q4 after KSH revision

Hungaryʼs GDP in the fourth quarter of 2018 was 5.1% higher than in the corresponding period a year before, with yearly GDP growth in 2018 amounting to 4.9%, according to a second estimate released today by the Central Statistical Office (KSH).

According to calendar-adjusted data, GDP was up 4.9% year-on-year in Q4, and up 1% compared to Q3.

The unadjusted year-on-year Q4 increase of 5.1% is 0.1 of a percentage point higher compared to the Q4 data released in the flash estimate in mid-February.

The value added by agriculture was 8.3% higher than in the same period of 2017. The performance of industry was up 4.1%, within which manufacturing output was up 4.3%. The performance grew in all manufacturing branches with relatively large weight, with the exception of the manufacture of machinery and equipment, the KSH noted. The value added by construction rose by 20%, with a marked increase in all branches.

The gross value added by services rose by 3.9% in total, with the highest growth (7.9%) registered in the wholesale and retail trade as well as accommodation and food service activities. The value added by information and communications grew 7.3%. The total performance of professional, scientific, technical and administrative activities was up 5.3%, and that of transportation and storage by 3.7%. The performance of financial and insurance activities was up by 2%. Loans and deposits of non-financial corporations and households increased as well. The total value added by public administration, education and health fell by 0.3%.

Services contributed by 2.3 percentage points, construction by 0.9 of a percentage point, and industry by 0.8 of a percentage points to the 5.1% increase in gross domestic product in Q4. In services, the most significant contribution (0.9 pp) was observed in the wholesale and retail trade, as well as accommodation and food service activities.

Consumption grows

Actual final consumption of households was up 4.3% compared to the same period of the previous year. Household final consumption expenditure, the largest proportion of the components, grew by 5%, within which volume increases were measured in most groups of expenditure. Of the groups of expenditure, the volume rose at rates exceeding the average in the case of furnishings and household equipment, recreation and culture, communication, and transport. The consumption expenditure of households realized in Hungary increased by 5.1%.

The volume of social transfers in kind from the government grew by 1%, while the actual final consumption of the government decreased  by 7%. The volume of social transfers in kind from non-profit institutions serving households increased by 4.3%. As a result of the above trends, actual final consumption grew 2.6%, the report on KSHʼs website says.

Gross fixed capital formation was 17% higher than in Q4 2017. The volume of investments in construction and in machinery and equipment both grew. In the industries with the largest weight, the volume of investments increased. Gross capital formation rose 21% compared to a year earlier. Domestic use as a whole increased by 7.2% in Q4.

In external trade, a surplus of HUF 394 bln was generated, lower at current prices than in 2017; the balance of trade in goods was in deficit. The volume of exports grew by 5.6% and that of imports by 8.2%. In the trade in goods, exports grew by 6.6% and imports by 8.8%. Within external trade, exports of services (including tourism) rose by 2% and their imports by 5.4% compared to a year before.

Actual final consumption contributed 1.8 percentage points and gross capital formation 5 percentage points to the 5.1% unadjusted growth of GDP in Q4. The balance of external trade as a whole decelerated growth by 1.7 percentage points.

The performance of the economy was up by 1% in Q4 compared to the previous quarter, according to calendar-adjusted data.

Gross value added grew by 1.2% in construction, by 1% in agriculture, by 0.9% in industry, and by 0.8% in services.

Household final consumption expenditure increased by 1.1% and the volume of social transfers in kind from the government by 0.3%, while that of the actual final consumption of the government was cut by 1.1%. Gross fixed capital formation went up by 2.7%. In external trade, exports rose by 3.6% and imports by 1.7%.

Calendar-adjusted GDP growth at 5%

According to the KSHʼs first estimate, the value of GDP was HUF 42,073 billion at current prices; its volume grew by 4.9% over the entirety of 2018. Based on seasonally and calendar-adjusted and reconciled data, the performance of the economy was up by a full 5% compared to the previous year.

From the production approach, gross value added grew by 23% in construction, by 5.3% in agriculture, by 4.4% in services, and by 3.2% in industry.

Services contributed 2.4 percentage points, construction 0.8 of a percentage point, industry 0.7 of a percentage point, and agriculture 0.2 of a percentage point to the growth, the KSH said.

From the expenditure approach, the actual final consumption of households was up by 4.6%, the actual final consumption of the government decreased by 2.1%, combining for a rise of 3.7% in actual final consumption. Both gross capital formation and gross fixed capital formation within this were 17% higher. Exports grew by 4.7% and imports by 7.1% over the course of 2018.

From the expenditure approach, actual final consumption increased the GDP growth rate by 2.6 percentage points and gross capital formation by 3.9 percentage points. The balance of external trade as a whole slowed down growth by 1.5 percentage points, the KSH said.

A flash estimate of GDP data for the first quarter of 2019 will be published by the KSH on May 15, with a more detailed second estimate following on May 31.