Hungary GDP Rises 4% y.o.y. in Q3

Analysis

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The volume of Hungary's gross domestic product increased by 4% in Hungary in the third quarter of 2022 compared to the corresponding period of the previous year, according to data published by the Central Statistical Office (KSH).

Compared to Q3 2021, industry increased its performance by 9.6%, within which manufacturing by 10.6%.

Among manufacturing branches, the largest contributors to the growth of industry, there were increases in the manufacture of motor vehicles, trailers, and semi-trailers, as well as electrical equipment. The value added of construction went up by 1.8%, while that of agriculture – owing to the severe drought in summer – decreased by 39.3% compared to the corresponding period of the previous year.

The gross value added of services became 5.6% higher in total.

The most marked increases occurred in the industries of transportation and storage (11.5%) as well as professional, scientific, technical and administrative activities (10.6%). The value added of accommodation and food service activities increased by 6.4%, and that of information and communication by 5.4%. The performance of financial and insurance activities grew by 5.3%. The performance of wholesale and retail trade rose by 5.2% compared to the same period of the previous year.

The value added of arts, entertainment, recreation, and other services, as well as real estate activities grew by 4.1%. The value added of human health and social work activities rose by 6.9% and that of education by 2.8%. The value added of public administration went down by 0.2%.

Services contributed by 3.4, industry by 1.7 percentage points, and construction by 0.1 percentage points to the 4% growth of GDP in Q3 2022. Within services, GDP was increased the most by professional, scientific, technical, and administrative activities (0.9 percentage points), and by transportation and storage (0.7 percentage points). The decrease in the performance of agriculture slowed the growth by 1.8 percentage points.

Household Consumption on the Rise

The actual final consumption of households rose by 4.2% compared to the same period of the previous year, KSH says. 

Household final consumption expenditure, representing the largest proportion of the components of the actual final consumption of households, increased by 4.1%.

The volume of domestic consumption expenditure grew in every durability group, that of semi-durable goods by 7.0%, the volume of services and durable goods by 5.7%, and the volume of non-durable ones by 1.9%.

The volume of social transfers in kind from the government became 5% higher, thus that of the actual final consumption of the government 0.5% lower. The volume of social transfers in kind from non-profit institutions serving households (NPISHs) rose by 3.8%.

As a result of the above trends, actual final consumption increased by 3.5%, the statistics office says.

Gross fixed capital formation grew by 4.1% in Q3 compared to the corresponding period of 2021. The volume of investments in construction went up to a higher extent than that of investments in machinery and equipment. Out of the industries with the highest share of investments, the volume of developments henceforward significantly rose in manufacturing as well as in real estate activities and fell in the area of transportation and storage.

Gross capital formation became 3.4% lower than one year earlier.

As a result of the trends of consumption and capital formation, domestic use as a whole grew by 1.4% in the 3rd quarter.

In the external trade of the economy, a deficit of HUF 999 billion was generated at current prices. The volume of exports went up at a higher rate (14.1%) than that of imports (10.6%). In trade in goods, accounting for some 85% of external trade, exports of goods became 13.7 and that of imports 9.4% higher than a year earlier.

Within the external trade of the economy, the exports of services (including tourism) increased by 16.4% and their imports by 18.0% compared to the same period of the previous year.

Actual final consumption contributed by 2.3 percentage points to the 4% increase of GDP. Gross capital formation lessened that by 0.8 percentage point. The balance of external trade as a whole increased the economic performance by 2.5 percentage points.

GDP Decreases Compared to Q2

However, compared to Q2 2022, Hungary's gross domestic product fell by 0.4%

From the production approach, value-added was up by 2.9% in industry and by 0.1% in construction, and was down by 5.2% in agriculture and by 0.7% in services.

From the expenditure approach, the volume of household final consumption expenditure rose by 0.5%, that of social transfers in kind from the government by 0.7% and the volume of the actual final consumption of the government by 0.6% out of the components of actual final consumption. Gross fixed capital formation increased by 0.6%. In external trade, the volume of exports grew by 4.6% and that of imports by 4%.

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