GDP growth exceeds expectations in Q2

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In the second quarter of 2018, gross domestic product (GDP) in Hungary rose by 4.4% according to seasonally and calendar-adjusted and reconciled data, the Central Statistical Office (KSH) said in a flash report released on Tuesday.

According to raw data, GDP growth was even higher, at 4.6% year-on-year. Most branches of the national economy contributed to the growth, market-based services to the greatest degree, the KSH said.

Compared to the preceding quarter, the volume of GDP grew by 0.9% – according to seasonally and calendar-adjusted and reconciled data.

In the first half of 2018, economic performance – based on unadjusted data – was 4.5% higher than a year earlier.

The GDP growth figures released today are higher than forecast by analysts questioned on Monday by business daily Világgazdaság, who expected growth of 4.2%. The  government forecasts annual growth of 4.3%, which seems realistic, analysts added.

A second estimate of GDP for the second quarter will be published on September 5.

Speaking to state news agency MTI, TakarékBank analyst Gergely Suppan said headline growth was much higher than generally expected. Growth could slow in the second half, he added, but will still be supported by investments in the public, business and retail sectors, as well as new capacity and a low base in the industrial sector.

K&H Bankʼs chief analyst Dávid Németh told MTI that mostly European Union funding had lifted Hungaryʼs growth rate over 4%, well above its potential for growth of around 2.5%. He put full-year growth at 4.2%.

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