“It is probably still too early to analyze the figures published today, as detailed figures will be published on September 6, but it can be clearly seen that market services, industry and the agriculture sector contributed chiefly to growth,” Mónika Kiss, Head of Research at Equilor Investment, told the Budapest Business Journal today. “The picking up of services could be felt earlier through price increases in the sector, while the German economy is thought to lift exports,” she added.
Like most analysts, she suggested growth for this year would probably be slightly above 2%.
“To reach 2.5% GDP growth by the end of the year would require really strong momentum in the second half, and caution arises due to the fact that calendar-effect and seasonally adjusted data lag unusually behind the raw, unadjusted data,” Kiss commented.
In the second quarter, GDP was up 2.6% according to year-on-year unadjusted data, while working day-adjusted (WDA) data show 2.2% growth, a CIB flash sent today concluded. Seasonally and working day-adjusted (SWDA) data show only 1.7% growth in year-on-year terms, while the same data reveal only 1.1% growth compared to the first quarter, according to CIB.
“Q2 GDP posted a year-on-year growth rate above the market consensus of 1.9%-2.0%, but both the WDA and SWDA figures warrant a cautious view of the growth data as they show a larger than usual deviation from the raw (unadjusted) figure,” the CIB flash noted. “The quarter-on-quarter figure (+1.1%) shows that Q2 2016 was the second strongest quarter of the last three years, but the year-on-year figure consistent with this calculation shows only 1.7% growth,” the CIB flash added.
The CIB analysis confirms that services, industry and agriculture delivered support to the relatively rapid growth. However, the construction sector kept slowing the overall growth rate even following an already extremely weak first quarter with double-digit drops. “At the same time, industrial production showed significant improvement versus the first quarter … the service sector was supported further by strengthening domestic demand. In tandem with the stronger industrial performance, net exports were also seen as a strong driver of growth, with moderate dynamics on the import side,” the CIB flash says.
“We are going to adjust our annual GDP forecast based on the detailed official figures. Based on the preliminary Q2 figure, we foresee an annual GDP growth rate close to or slightly above 2% in 2016,” the CIB flash concludes, which is in line with the market consensus of Hungary’s GDP to be around 2%-2.3% by the end of the year.
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