Analysts polled by MTI blamed the recession in Western Europe and slowly increasing domestic household consumption for deteriorating trade figures published on Monday.
Hungary had a €239 million trade deficit in July after running surpluses for five months in a row, the Central Statistics Office (KSH) reported in the morning on Monday.
Raiffeisen Bank’s Zoltán Török said the July deficit was at least €60 million bigger than expected. He added that the full-year trade balance was still likely to be a surplus, which has not been seen for many, many years. Török explained the worsening trade figures citing the recession on Hungary’s main export markets and a pick up in imports as Hungarian households’ rate of consumption slowly grows. Export growth is unlikely to improve much in the future, but the current 8% annual increase could be sustainable, he said. Hungary’s export structure is changing, as more exports are going to high-growth economies in Central and Eastern Europe. At the same time, more multinationals are bringing production to Hungary, expanding the country’s export capacity.
Takarékbank’s Gergely Suppan also said the slowdown in export growth was a result of the recession in Western Europe. Though he noted that growth in the base period was high because of big grain exports to European intervention stores. The unfavorable economic conditions in Europe will keep Hungary’s trade balance in the red for at least another half year, he said, citing slowing exports in the vehicle and electronics sectors, two main engines of Hungary’s growth. (MTI-Econews)