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Analysts see faster GDP growth in H2

Hungary's GDP growth could increase further in the second half of 2011, analysts interviewed by MTI said, forecasting GDP growth near to 3% yr/yr for the full year, while the National Economy Ministry said the gradual rise in domestic demand and investments in H2 could support 3.1% economic growth for 2011.

The Central Statistics Office (KSH) on Friday reported yr/yr GDP growth of unadjusted 2.4% and calendar-adjusted 2.3% for the first quarter, in line with expectations, with GDP up a seasonally and calendar-adjusted 0.7% from the previous quarter.

In a statement sent to MTI, the National Economy Ministry (NGM) emphasized that the Hungary's GDP growth has reached a four-year peak, supported by rising export demand.

NGM said investments started in 2011 and in earlier years - such as the Mercedes, Hankook and Audi investments - as well as growing domestic demand related to payments of real yields of private pension funds and personal income tax changes could support faster economic growth in the second half of the year.

Gergely Suppán of TakarékBank said GDP growth continues to be driven by exports and industrial production. Domestic demand still does not contribute substantially to economic growth, but at least it no more pushes it lower, he said.

Suppán forecast 2.8% yr/yr growth in Q2 and expects to see a gradual acceleration in the coming quarters and a slow recovery of consumption and investments from the third quarter.

For the last two quarters, the analyst predicted 3% and 3.8% GDP growth, respectively, considering the low base, which would lift full-year growth to about 3%.

For the year 2012, Suppán forecasts 3.6% GDP growth as certain auto-industry investments begin production. The outlook for industrial output remains promising, he added, referring to the Hungarian and German April PMI indices and the dynamic rise in new industrial orders and industrial order stock in March.

Zoltán Árokszállási of Erste Bank also said he expects to see somewhat higher GDP growth in the coming quarters, with the yr/yr pace reaching or slightly exceeding 3% in the second half of the year. For 2011 as a whole, he predicted GDP growth of 2.7%. Looking ahead, he forecast GDP growth of around 3.1% for 2012.

As for the March industrial output figures, also published on Friday, Árokszállási said the sectors producing for the domestic market continue to perform relatively poorly, while exporters continue to perform well.

KSH reported 9.2% industrial output growth for March compared with the same month of last year.