Though the slowing drop in Hungary's industrial output is reassuring, the uncertain export outlook and narrowing domestic demand mean it is still too early to talk about a recovery, analysts told MTI, after the publication of a second reading of March industrial output data.
Hungary's industrial output fell a workday-adjusted 19.6% in March, slowing from a 25.2% drop in February, the Central Statistical Office (KSH) said in the morning. In a month-on-month comparison, industrial output rose 4.3% in March, according to workday- and seasonally-adjusted figures.
CIB Bank's György Barta said the March data appear to show a stabilization after big drops in output in January and February. The month-on-month increase is especially positive, he added.
Industrial output will not start growing any time soon, considering it has fallen for the past ten months, Barta said. The outlook for Hungarian exports is uncertain and domestic demand is narrowing, thus a pick-up cannot be expected in the short term. The detailed data for March show Hungary's exporting companies are hurting the worst, he added.
Barta noted that analysts estimate Hungary's economy contracted by about 7% in Q1. KSH will publish Q1 GDP data on Friday morning.
MKB Bank's Zsolt Kondrát said the detail industrial output data shows export sales continued to stagnate as domestic sales fell. The trend is likely to continue for the rest of the year and into 2010, he added.
There has been no significant change in the outlook for Hungary's main export markets, even though measures of business sentiment have improved, Kondrát said. (MTI – Econews)