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Fall in investment volume smaller than expected

The fall in investment volume in Hungary in the first quarter was less than expected and could signal a turnaround, analysts told MTI on Tuesday when asked about the fresh data.

Investment volume fell 1.1% in Q1 from the same period a year earlier, the Central Statistics Office (KSH) said early Tuesday. Analysts had expected a drop of around 3%.

In a seasonally-adjusted quarter-on-quarter comparison, investment volume rose 1.7% in Q1.

Gergely Suppán of TakarékBank noted the robust growth in investments in the manufacturing sector, helped in part by a big plant German carmaker Daimler is building in central Hungary. Investments started by carmakers Audi and Opel at their bases in Hungary will give impetus to the increase, he added.

The outlook for other sectors is mixed, although all three of Hungary's mobile companies have announced network investments which could raise investments from the start of the summer, he said.

The drop in home building investments was no surprise and the decline is likely to continue, Mr Suppan said.

He put investment volume growth for the full year at 2.5-3.0%.

Erste Bank's Zoltán Árokszállási said investments are being driven by Hungary's exporters as the domestic economy remains weak. Building investments will slowly pick up while the robust growth of automotive industry investments slows, he added.

Árokszállási put growth of fixed capital formation at 2% for the full year.