The performance of Hungary’s economy was strongly influenced by government measures to improve the country’s balance as well as the global financial and economic crises, the Central Statistics Office (KSH) said in an annual summary of 2008 published on Tuesday.
In spite of worsening conditions on global markets, Hungary’s economy grew 2% in the H1 of 2008, but growth slowed to 0.8% in Q3. KSH and its research arm Ecostat estimated that Hungary’s GDP fell 2.0% in Q4, causing full-year growth to slow to 0.6% from 1.1% in the previous year.
On the consumption side, domestic consumption grew only slightly in January-September. Final household consumption grew 1.0%, and government consumption rose about the same. Gross capital accumulation fell in Q1, Q2 and Q3, and the latest data show a 3.2% decline in Q4 as investments fell in many sectors with the exception of the mining, energy and farm sectors. Gross capital accumulation dropped 3.0% for the full year.
Hungary’s export-oriented sectors contracted or stagnated as the economic climate in Europe deteriorated. The industrial sector lost its momentum during the year, and in the H2, especially during the last months of the year, dropped sharply enough to result in a full-year contraction.
Output of the farm sector improved markedly because of good weather following a drought in 2007. The construction sector picked up in the last months of the year thanks to road building projects.
Industrial production volume fell 1.1% in 2008, after an 8.2% increase in 2007. Domestic sales dropped 2% and export sales fell almost 1% after double-digit growth in 2007.
In December, domestic sales plunged 11% and exports sales plummeted 22% from the same month a year earlier. Output volume of Hungary’s biggest export-oriented companies -- which account for seven-tenths of all production -- fell the most, by 2.5%.
Gross output per capita dropped 1.5% in a yearly comparison. Stock of industrial orders was down 16% at the end of December from twelve months earlier. New order stock slid a sharp 37%. Industrial producer prices rose 5.3% in 2008, as domestic prices increased 11.6% and export prices climbed 0.6%.
Output of the construction sector continued a downward trend started in 2006: the sector contracted 15% in 2007 and 5.1% in 2008. Stock of orders was 23% lower at the end of December than twelve months earlier.
After declining for three years in a row, output of the farm sector jumped a preliminary 27% in 2008, reaching one of the highest levels of the decade, along with 2004. Crop output rose 47%, though output of the livestock segment fell 1.3%.
Retail sales fell 1.8% in 2008, including a 2.3% drop in Q4. The fall was 2.1% and 2.5% according to calendar-adjusted figures. Sales of appliances and consumer electronics dropped 2.5%. Sales of food were down 1.2%. (MTI-Econews)