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Stats office confirms Q1 GDP growth at 4.4%

The volume of gross domestic product was 4.4% higher in Hungary in the first quarter of 2018 than in the corresponding period of the previous year, with market-based services being the primary contributor, a second estimate from the Central Statistical Office (KSH) confirmed Tuesday.

Compared with the Q1 figure issued in the flash estimate on May 15, the headline figure of the second estimate was unchanged. Seasonally and calendar-adjusted and reconciled data show that the performance of the economy improved by 4.7% compared to Q1 2017, and by 1.2% compared to the preceding quarter.

According to the production approach, the KSH reported that the value added by industry grew by 2.0%, within which that of manufacturing rose by 2.5% compared to the same period of the previous year.

The performance of construction rose by 22.5%, slowing from growth of over 30% in the preceding three quarters. The value added by agriculture decreased by 0.6%.

Gross value added by services was up by 4.9% in total. Within this, value added by the wholesale and retail trade, as well as accommodation and food service activities, rose by 8.2%, while value added by transportation and storage was up 5.2%.

Services contributed by 2.6 percentage points, industry by 0.5 of a percentage point, and construction by 0.5 of a percentage point to the 4.4% growth of GDP in the first quarter of 2018.

Household consumption up 5.1%

According to the expenditure approach, the actual final consumption of households was up 5.1% in Q1 2018, compared to the corresponding period of the previous year. Household final consumption expenditure, representing the largest proportion of the components of actual final consumption of households, grew 5.9%.

The volume of social transfers in kind from the government was up by 0.7%, and that of the actual final consumption of the government by 4.6%.

As a result of the above trends, actual final consumption rose 5.0% in total.

Gross fixed capital formation went on increasing significantly, being 17% higher in the first quarter of 2018 than in Q1 2017.

The volume of investments in construction and machinery and equipment both went up substantially, the former to a higher extent. Growth was observed in the volume of investment in the majority of industries with relatively large weight, compared with a slight fall in the case of manufacturing. Investments of budgetary units rose outstandingly, while investment activities of enterprises lessened.

Gross capital formation increased by 4.5% in total compared to one year earlier.

In the external trade of the national economy, a surplus of HUF 671 billion was generated at current prices in Q1 2018. Exports were up by 3.5% and imports by 3.8%.

In the trade in goods, exports grew by 3.1% and imports by 5.1%. Exports of services (including tourism) increased by 5.4%, while imports declined by 2.8% compared to a year earlier.

Actual final consumption contributed by 3.6 percentage points and gross capital formation by 0.7 of a percentage point to the 4.4% GDP growth in the first quarter of 2018. The balance of external trade as a whole did not influence the GDP growth rate, the KSH noted.

A flash estimate of GDP data for the second quarter of 2018 will be published by the KSH on August 14, with more detailed figures to be released on September 5.