Investments decreased by 9.9 % y.o.y. in Q2



In the second quarter of 2020 the national economy’s investments further decreased, the volume of developments lagged 9.9% behind, compared to the same period of the previous year, according to data released by the Central Statistical Office (KSH)

Image by pixabay

Most sections of the economy contributed to this trend. The investments of the budgetary units declined to a larger degree than the developments of the enterprises. In the case of the former mostly the shrinking performance value of the EU projects, at the latter mainly the unfavorably changing economic environment caused the reduced activity.

The volume of investment activity decreased by 9.9%. Within it construction investments representing close to six-tenth of the total volume of investments decreased by 9.2%, investments in machinery and equipment representing four-tenth of the total value of investments decreased to a larger degree, by 11%.

This represents the most unfavorable change of all three indicators in the last three years, KSH notes.

The volume of investments in the case of enterprises employing at least 50 people and realizing 57% of investment performance decreased by 12%. Foreign enterprises’ reduced development activity due to the unfavorable economic environment caused by the epidemic played an outstanding role.

At the same time in the case of budgetary units, realizing 13% of investments, developments were down by an even higher rate, by 19% compared to the base period. This was partially due to the fact that a smaller volume of EU-financed projects has been realized than a year earlier.

Developments in the largest weight representing manufacturing – being responsible for more than one-quarter of investments – significantly fell (by 10%). Developments decreased widely in all of the subsections, except three, investments decreased in an outstanding degree in the great weight representing manufacture of transport equipment, in the manufacture of basic metals and manufacture of fabricated metal products except machinery and equipment

Due to long-lasting, ongoing, high-value projects investment volume increased outstandingly in the fields of manufacture of electrical equipment, manufacture of basic pharmaceutical products and pharmaceutical preparations, and in the manufacture of food products.

The investment performance of real estate activities realizing close to one-fifth of total investments, fell by 2%, within it dwelling constructions significantly grew, at the same time developments oriented toward business facilities for rent (e.g. office buildings) shrunk.

The decrease in the third larger field, transportation, and storage continued (by 9.6%), caused mainly by the reduction of infrastructural developments. Moreover, investments of enterprises engaged in transportation also fell behind compared to the base period.

Certain fields of the general government contributed to the performance decrease of the national economy’s investments. The volume plummeted by 29% in the case of the fourth largest investor, public administration and defense; compulsory social security, - mainly as a result of the more moderate acquisitions conducted by central governmental bodies. In the eighth largest field, that of arts, entertainment and recreation – due to the lower expenditure of the ongoing sport and culture-related projects – investments decreased by 28%.

In the case of water supply and waste management investments decreased at a higher rate (by 14%) than the national economy’s average as well.

Investments in the fifth-largest field, agriculture, forestry and fishing increased moderately (by 1.8%), as mainly smaller businesses increased their machinery acquisitions.

In the field of wholesale and retail trade, and repair of motor vehicles and motorcycles carrying the sixth-largest weight, investments significantly decreased (by 13%). Growing developments in retail trade did not counterbalance the decline in the wholesale trade as well as in the retail trade and repair of motor vehicles and motorcycles.

Developments grew significantly in several smaller weight representing sections. In relation with the pandemic situation, due the high volume of developments in the field of in-patient care, investments in human health and social work activities grew by 32%.

Investments grew significantly in the field of the energy industry (14%) among others due to electricity network renewals. Investments also grew in the field of information and communication (6.5%) where network developments played a role, too.

At the same time, investment decreases were larger in several relatively small weight representing sections than the economy’s average.

The greatest decrease was recorded in the field of mining and quarrying (55%), in correlation with the fall in the international price of energy carriers.

Among business units in construction investment performance fell by 36%, in the field of accommodation and food service activities – mainly as a result of the low-key developments of smaller accommodations – it decreased by 35%.

Investments down 3.3% quarter-on-quarter

Compared to the previous quarter, the seasonally adjusted volume of investments decreased by 3.3% compared to the previous quarter, continuing the trend that started in Q3 2019. Within it, the seasonally adjusted volume of construction investments decreased by 2.9 %, while investments in machinery and equipment decreased to a larger degree, by 4.3%.

Moody's Affirms Budapest's 'Baa3' Rating Ratings

Moody's Affirms Budapest's 'Baa3' Rating

Bulgaria's Household Income, Spending Rise 20% in 2023 World

Bulgaria's Household Income, Spending Rise 20% in 2023

Job Fair and Career Prep at Corvinus Starts Tomorrow HR

Job Fair and Career Prep at Corvinus Starts Tomorrow

Spago Budapest Offering Unique Sunday Brunch Experience Food

Spago Budapest Offering Unique Sunday Brunch Experience


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.