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Analysts put Hungary GDP growth at 2.4% in Q1

Hungary’s GDP growth picked up to 2.4% yr/yr in the first quarter of 2011 from 1.9% in the fourth quarter of 2010 according to the consensus of analysts in a poll carried out by the financial daily Napi Gazdaság, the newspaper reported on Wednesday.

The Central Statistical Office (KSH) will publish a first reading of Q1 GDP figures on Friday, May 13.

The country's GDP grew 1.9%, or a calendar-adjusted 1.7% yr/yr, in Q4 last year. GDP was up by a seasonally adjusted 0.2% from Q3.

Analysts said GDP growth was helped by a widening external trade surplus, by healthy growth of industrial output and a pickup in services.

Household consumption may have increased from the previous quarter and probably stagnated in an annual comparison, Gergely Fórián Szabó of Pioneer assets manager said. The Q1 2010 base was low, he said, and this will be the first time to test the effect of the flat personal-income tax. Retail sales in the first two months were, however, low.

Investments are likely to stagnate at most as rising manufacturing-industry investments can at most offset the steep fall in home construction, the Pioneer analyst said.

The first quarter was outstanding for the industrial sector; the only component with a fall could be the construction sector with the drop in home building, Gergely Suppan of Takarékbank said.

The services sector could also have a good start, Suppan said, citing tourism. The rising turnover of the bourse and government securities helped the performance in financial services, but the credit crunch and the downsizing of private pension funds after 97% of their members opted to return to the state pension system has certainly had an adverse affect.