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UPDATE - Hungary Q2 growth 'big disappointment' - analysts

Data on Hungary's second-quarter GDP were a big disappointment, analysts told MTI on Tuesday.

Hungary's GDP rose an unadjusted 1.5% in Q2 from the same period a year earlier, slowing from 2.5% growth in the previous quarter, the Central Statistics Office (KSH) said in a preliminary estimate early Tuesday.

Analysts had put GDP growth for the period at 2.1-2.3%.

Gergely Suppan of Takarékbank said the worse than expected data mean full-year GDP growth is unlikely to be much over 2%. In light of Q2 GDP data for Germany, Hungary's biggest export market, also published on Tuesday, it is a wonder Hungary's GDP didn't fall quarter-on-quarter, he added.

The data also worsen the outlook for next year, even though the start of production at a plant Daimler is building in Hungary could add 0.6 percentage points to Hungary's GDP growth, Suppan said.

As for earlier expectations of full-year GDP growth around 3%, Erste Bank's Zoltán Árokszállási said "forget it". Industrial output is slowing and the construction sector continues to contract, he added.

Economic research institutes told MTI they would lower their GDP growth projections to 1.7-2.2% for this year and to 1.5-2.0% for next year because of the poor showing in Q2.

Kopint-Tárki projected full-year growth for 2011 of 2.5% on Monday in a Reuters poll, but it now forecasts growth of 2.2%, with downward risk, the think-tank's chief Éva Palócz told MTI. Estimates were too optimistic for the service sector as well as inventories, she added.

Kopint-Tárki knocked down its projection for 2012 GDP growth from 3.0% to 2.0%.

Pénzügykutató chief analyst Mária Zita Petschnig said the projection the research institute gave for 2011 GDP growth in the latest Reuters poll was 2.0%. In light of the fresh data, it has bumped down the forecast to 1.7%, she said.

Petschnig put 2012 GDP growth at 1-1.5%.