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Hungary investment volume falls 7.7%

Investment volume in Hungary dropped 7.7% year-on-year in the first quarter of 2009, preliminary figures published by the Central Statistics Office (KSH) on Friday show. The drop follows a 3.2% yr/yr decrease in Q4 2008.

2008 investment volume dropped 3.0% from 2007.

Q1 investments fell a seasonally-adjusted 1.1% from Q4 2008 after a 0.1% rise in Q4 from Q3.

Construction-type investments were down 5.1% yr/yr in Q1 and investment in machinery and equipment fell 9.9%.

Investments in the manufacturing sector were down 6.8% mainly because of a decline in investment in tyre manufacturing. Big projects in the segment were completed in the base period, and cutbacks related to the auto industry crisis were made in Q1.

Investment in transport and storage fell 21.1% yr/yr in Q1, accelerating from a 6% drop in Q4. The category includes road construction, for which investment volume was flat.

The information and communications sector registered a marked 22.9% yr/yr rise in investment volume after a 5.2% fall in Q4 fuelled by network development and IT upgrades.

Real estate businesses, including home building companies, raised their investment volume by 3.5% yr/yr in Q1, after declines in the previous six months.

Tourism-related investments in accommodation and catering services fell 21.7% yr/yr in Q1, albeit from a high base, after climbing 10.9% in Q4.

A high base also explains the 18.2% yr/yr decrease in agricultural investment in Q1.

Investments in the public administration sector fell 24% yr/yr in Q1 as budget cuts were made.

Investments in the education and healthcare sector fell, 11.8% yr/yr and 10.2%, respectively, continuing a drop of more than two years. (MTI-ECONEWS)