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KSH flash: GDP up 4.8% in third quarter

Gross domestic product (GDP) in Hungary was up 4.8% according to raw data in the third quarter of 2018, compared to the corresponding period of the previous year, shows a flash estimate from the Central Statistical Office (KSH). Most industries contributed to the growth, market-based services to the greatest extent.

The raw figure was down slightly from the 4.9% rise registered in the previous quarter. According to seasonally and calendar-adjusted and reconciled data, GDP was up 5.0% in Q3, the KSH noted.

Compared to the preceding quarter, the volume of GDP grew by 1.2% in the third quarter of 2018, according to seasonally and calendar-adjusted and reconciled data.

In the first three quarters of 2018, economic performance – based on unadjusted data – was 4.7% higher than a year earlier, while growth was 4.9% in Q1-Q3 according to calendar-adjusted data.

In a statement cited by national news agency MTI, Minister of Finance Mihály Varga noted that the adjusted Q3 growth rate was two-and-a-half times the European Union average and the second highest among all Member States.

Among the sectors contributing to the increase, he noted the construction and service sectors. He added that rising consumer consumption, boosted by higher wages, together with a double-digit increase in investments, is also supporting economic growth.

Expectations in sync

Cited by economic news portal vg.hu, Varga recalled that the European Commission recently raised its projection for Hungarian growth to 4.3%, so that by now both domestic and international organizations are almost unanimous in predicting growth of over 4% in 2018, in line with the Hungarian governmentʼs own expectation. 

The minister added that to achieve this will require, among other things, support for the governmentʼs home creation program, rising wages over the long term, increasing domestic consumption, strong exports, realization of development projects, and continuing improved performance of the services sector.

Sounding a word of caution, ING Bank macroeconomic analyst Péter Virovácz noted that despite the surprisingly strong third-quarter growth, the Hungarian economy may yet lose some momentum in 2019, since the expected deterioration in external demand cannot be ignored. For this year, however, he did not rule out the highest rate of growth seen in Hungary for some 15 years, albeit provisional on continuing favorable performance in the final quarter.

A second, more detailed estimate of GDP for the third quarter of 2018 and the year to date will be published on December 5.