Hungarian ministry: GDP growth to exceed projection for 2014

Analysis

Hungary's GDP growth this year could exceed the 2.3% projection in the country's updated Convergence Program by 0.3-0.6 percentage point, the National Economy Ministry (NGM) said after a second reading of Q1 GDP data was released on Wednesday.

Hungary's economy expanded by 3.5% in Q1, the Central Statistics Office (KSH) confirmed in the morning. The NGM said Hungary's GDP growth is becoming more balanced and healthier, noting that domestic demand, not just net exports, was supporting the increase.

It said increased capacity of the country's automotive sector, a pickup in both domestic and external demand, higher construction sector output supported by European Union funding, and state and private sector developments had lifted industrial output.

The ministry said growing consumption as well as investments supported the increase in domestic demand. It added that more business activity, the accelerated use of EU funding, favorable growth outlooks, the big increase in home construction, low yields, the National Bank of Hungary's Funding for Growth Scheme and the good business environment would help speed up investment growth.

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