Are you sure?

Analysts say July decline in monthly trade surplus likely to be short-lived

July trade figures published on Tuesday morning showed a surprising decline in Hungary's trade surplus, though do not indicate that that import growth will continue to exceed export growth over the longer term, analysts told MTI. They still expect a full-year trade surplus well above last year's €3.738 billion.

The Central Statistical Office reported on Tuesday morning that Hungary had a €241 million trade surplus in July 2010, well down from a €564 million surplus in June and a €328 million surplus a year earlier. Export growth slowed to below import growth.

Zoltán Török of Raiffeisen Bank commented that he does not expect import growth to continue to outpace export growth as it did in July, noting there no significant changes have taken place in terms of either consumption of investment that would serve to underpin a faster rise in imports than exports. Török commented that Hungary would likely generate greater trade surpluses over the coming months, predicting a surplus of €5.5 billion for the full year.

Zsolt Kondrát of MKB Bank said that the country's trade surplus was much lower than expected in July, as exports rose slower than imports. Both paces remained, however, high, although he expects the pace to slow as a result of the slowing economic growth among and less orders from Hungary's main euro-zone trade partners.

The MKB Bank leading analyst forecast remained a continued slowing of both import and export growth over the coming months as the improved performance of the late months of 2009 gradually enters the base. Hungary should nevertheless continue to record monthly trade surpluses. Kondrát expects a trade surplus of €5 billion this year and predicts Hungary will generate a surplus in 2011 as well. (MTI-Econews)