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Hungary?s growth rate slows down on lower export volume

In Q1 2005 economic performance has grown 2.9%, but the rate of increase has become slower because of decreasing exports, the Central Statistics Office (KSH) reported. The service sector grew 3.6%, while agriculture and the manufacturing industry saw only 1.5% growth compared with the same period in 2004. Consumer prices have increased 3.7% year-on-year between January and April, slower than in last year. New investment was the main driver behind economic growth, with approximately 7% more spent on development than in Q1 2004. The bulk of new investment went into road and motorway construction. Export has grown only by 8% while import increased by 5%, and foreign trade deficit has decreased in spite of increasingly unfavorable terms of trade from Hungary?s point of view. Government deficit without the deficit of local governments has increased further to Ft 710 billion during the first four months, while in the same period last year it was Ft 548 billion.