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Hungary service foreign trade surplus drops in Q1

Hungary had a €535 million surplus in trade of services in Q1 2011, rising €20 million from the last quarter of 2010 but down €78 million in one year, data published by the Central Statistics Office (KSH) show.

Exports of services rose 7.3% yr/yr in euro terms in Q1, below the 8.9% increase in Q4 2010 while import growth continued to pick and reached 12% in Q1 from a year earlier after rising 3.8% in Q4.

Exports of the sector rose 9.5% to €14.3 billion last year after contracting almost 5% in 2009. Imports edged down 0.1% to €11.7 billion after declining almost 10% in 2009.

Within overall trade of services, Hungary's surplus in tourism services dropped €78 million in one year to €265 million as revenue from tourism services (or exports) fell 6.2% yr/yr to €723 million in Q1, while tourism spending (imports) rose 7.0% to €458 million. The trend was just the opposite last year.

Both exports and imports of freight and transport services continued to rise at double-digit rates; the sector started expanding year-on-year in Q1 2010. Imports of these services totaled €769 million in Q1, rising 14.2%, and their exports grew 18.9% to €538 million. The sector's trade surplus widened €55 million in one year to €231 million in Q1.

Within the freight and transport sector, both spending and revenue rose at an above average rate in the road in the water haulage segments and the auxiliary services segment, which includes intermodal deliveries and warehouse services, KSH figures revealed. The rise in the air freight segment came mainly from deliveries to and from the EU15 countries.

Exports of business services rose 9.1% to €1.9 billion, slowing from double-digit rises in 2010 after a 1.2% drop in 2009. Imports rose 12.5% yr/yr to €1.96 billion after only modest increases last year and an almost 10% drop in 2009. Exports in the sector have been rising year-on-year since Q1 2010 and imports started to rise in Q2. The sector, which usually runs a deficit, posted a surplus as deficits and surpluses have alternated since the beginning of 2010.

Within business services, areas with rapidly rising exports last year included re-export and other trade-related services, up more than 56% yr/yr, within-corporate-group services, up 61.4% and financial services, rising 22.8%.

Trade fell both ways, in contrast, in construction services, in insurance services and in communication as well as in consultancy and PR services. Exports of R&D services fell more than 20% while their exports jumped more than 70%. Exports of licenses and patents were practically unchanged while their imports rose a moderate 5.5% from Q1 last year.

Exports of personal, cultural and amusement services dropped by a third, while their import fell only slightly.

Excluding tourism, Germany remained Hungary's biggest trading partner in services, accounting for 19.1% of Hungary's service imports and 13.2% of its exports. The United States was runner-up, with a 13.2% share in services imports and 8.6% of exports. The UK was in third place, accounting for 10.2% of imports and 7.9% of exports.

Hungary's trade in services, excluding tourism, showed a €110 million deficit with Germany, a €74 million deficit with the US and a €36 million deficit with the UK in Q1. Among the country's ten biggest trade partners, Hungary had a €109 million trade deficit with the Netherlands, a €37 million surplus with France, a €25 million surplus with Austria and an €28 million surplus with Switzerland.

Beside the U.S., the only non-EU member among the ten biggest partners of service exports to Hungary was Switzerland, accounting for 3.1% of the total, and Japan, accounting for 4.9%, placed fifth on the export destination list.