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KSH revises Q3 GDP growth upwards to 4.9%

Hungaryʼs gross domestic product (GDP) rose 4.9% year-on-year in the third quarter of 2018, the Central Statistical Office (KSH) said in a second estimate of data on Wednesday. The KSH raised the figure from 4.8% in its initial flash report on November 14.

The KSH revised the figure upwards mainly on the better than expected performance of market-based services and strong growth in higher value-added branches of industry.

On the production side, value added in the farm sector reached 3.4%, while the industrial sector grew by 2.7%. Within the industrial sector, manufacturing expanded by 2.5% as all major branches grew, with the exception of machinery and vehicle production.

Value added in the construction sector jumped a striking 27.5%, within which there was a marked increase in all branches.

The service sector expanded by 3.8%, with growth reaching 6.9% in wholesale and retail trade, accommodation and catering activities.

The performance of financial and insurance activities was up by 2.5%, largely due to the improvement of financial intermediation services indirectly measured (FISIM), while loans and deposits of non-financial corporations and households also rose.

In the professional, scientific, technical and administrative services segment, growth was 6.4%.   

Services added 2.2 percentage points to headline growth, while construction contributed 1.1 percentage points, and industry 0.6 of a percentage point.

On the expenditure side, actual final consumption was up 4.0% as final consumption of households increased 4.7% and final consumption of the government edged up 0.1%.

Gross fixed capital formation soared by 20.0%. The volume of investments in construction and in machinery and equipment both went up considerably, the former at a higher rate.

Actual final consumption added 2.7 percentage points to headline growth and gross capital formation 4.0 percentage points. The trade balance slowed growth by 1.7 percentage points as the trade surplus narrowed.  

Data adjusted for seasonal and calendar year effects, and reconciled, shows GDP rose 5.2% year-on-year in Q3. In a quarter-on-quarter comparison, GDP climbed an adjusted 1.3%.

For the first three quarters of 2018, headline GDP growth was an unadjusted 4.8% year-on-year, the KSH reported.

The KSH will release its flash estimate of GDP for the fourth quarter, and for 2018 as a whole, in February 2019, with a second, fuller estimate to be published in March.