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Analysts raise full-year GDP growth forecasts after Q3 data surprises

Hungary's economy is likely to grow 1.0-1.4% in 2010, analysts told MTI, raising their projections after the release of higher-than-expected Q3 GDP data.

Hungary's year-on-year GDP growth was 1.6% in Q3, up from 0.8% in Q2, the Central Statistical Office (KSH) said in the morning. Growth was well over the 1.1% estimate by analysts.

MKB Bank chief analyst Zsolt Kondrát said both the year-on-year figure and the quarter-on-quarter figure (0.8%) were over the bank's estimate of 0.9% and 0.2%, respectively. Kondrát raised his full-year projection from 1.1% to 1.4% and put Q4 year-on-year GDP at 2.7%.

Takarékbank's Gergely Suppan said the scale of growth in Q3 was surprising, even taking into account the base. Full-year growth could exceed Takarékbank's 1.2% projection he added.

Hungary's economy contracted 7.5% in Q3 2009 from the same period a year earlier.

Fresh industrial output data show that exports continue to be the engine of growth, but the rise in retail sales indicate domestic consumption is finally starting to recover after dropping for a year and a half, Suppan said.

Zoltán Árokszállási of Erste Bank said the second reading of the Q3 data might show a rise in government consumption. Árokszállási said he raised his projection for full-year growth from 0.9% to 1.1-1.2% on the back of the better-than-expected data. (MTI – Econews)