GDP down 2.1% year-on-year in Q1

The performance of industry increased by 3.4% year-on-year, within which that of manufacturing by 4.1% compared to the same period of the previous year. Among manufacturing branches, the largest contributor to the growth of industry was the increase in the manufacture of electrical equipment. The value-added of construction lessened by 2.4% and that of agriculture grew by 2.5% compared to the corresponding period of the previous year.

The gross value added of services decreased by 3.5% in total compared to Q1 2020. The highest falls were in accommodation and food service activities (–47.7%) as well as transportation and storage (–11.1%). The performance of wholesale and retail trade moderated by 0.3%. The value-added of professional, scientific, technical and administrative activities went down by 5.4% and that of arts, entertainment, and other services by 9.4%. The performance of financial and insurance activities increased by 3.4%. The value-added of public administration became 2.5% higher and that of education and of health 3.8% and 2.3% lower, respectively.

Services contributed by 2.1 percentage points and construction by 0.1 percentage point to the 2.1% decrease of gross domestic product in the 1st quarter of 2021. Within services, GDP was lowered the most (by 0.8 percentage points) by wholesale and retail trade, and repair of motor vehicles and motorcycles, as well as accommodation and food service activities. Industry improved the economic performance by 0.7 percentage points.

Household consumption falls

The actual final consumption of households lessened by 3.7% compared to the same period of the previous year. Household final consumption expenditure, representing the largest proportion of the components of the actual final consumption of households, decreased by 4.8%. The (domestic) consumption expenditure of households realized on the territory of Hungary became 6.5% lower than a year earlier, because the consumption expenditure of non-residents (e.g. tourists) declined significantly in the 1st quarter this year, too. Within this, the volume of domestic consumption expenditure went down in the majority of durability groups as well – semi-durable (–6.9%) and non-durable goods (–2.6%) and services (–11.1%), while that of durable goods slightly increased (1.7%).

The volume of social transfers in kind from the government became 1.3% and that of the actual final consumption of the government 10.4% higher. The volume of social transfers in kind from non-profit institutions serving households lessened by 0.5%.

As a result of the above trends, actual final consumption became 1.6% lower, KSH notes.

Gross fixed capital formation decreased by 0.1% in the first quarter compared to Q1 2020. The volume of investments in construction slightly diminished, while that of investments in machinery and equipment went up. Out of the industries with the largest weight in total investments, the volume of investments rose in real estate activities and public administration and defense and significantly decreased in manufacturing as well as transportation and storage.

Gross capital formation fell by 12.4% compared to one year earlier.

As a result of the trends of consumption and capital formation, domestic use as a whole became 4.3% lower in the first quarter.

In the external trade of the economy, a surplus was generated at current prices, its value was HUF 669 billion. The volume of exports went up more considerably (3.3%) than that of imports (1.1%). In trade in goods, exports were 10% and imports 3.5% larger than a year earlier. Within the external trade of the economy, the exports of services (including tourism) dropped by 24% and their imports by 12.1%.

Actual final consumption contributed by 1.2 percentage points and gross capital formation by 2.8 percentage points to the 2.1% fall of gross domestic product in Q1 2021. The balance of external trade as a whole increased the economic performance by 2 percentage points.

Economy grows compared to Q4 2020

The performance of the economy grew by 2% compared to Q4 2020.

Gross value added increased by 0.3% in agriculture, by 3.1% in industry, by 6.0% in construction and by 2.2% in services.

Household final consumption expenditure became 0.9%, the volume of social transfers in kind from the government 0.5% and the actual final consumption of the government 2.6% higher out of the components of actual final consumption. Gross fixed capital formation lessened by 0.6%. In external trade, exports were up by 1.6% and imports by 0.8%.