Hungary's GDP growth accelerates to 1% y/y in Q2.

By bne IntelliNews September 9, 2010
Hungary's GDP grew by 1% y/y in Q2, picking up from the minimal 0.1% y/y increase in previous quarter, the statistics office (KSH) reported confirming preliminary estimates. On a calendar and seasonally-adjusted basis, GDP remained unchanged in quarterly terms. External demand was a main driving force behind the economic recovery in Q2, since net exports contributed for 1.8pps growth for the quarter. The drop in domestic demand moderated to 0.9% y/y in Q2, from 2.4% y/y in previous quarter. Gross capital formation expanded 10.8% y/y, also contributing for the overall GDP growth. This however was entirely on account of increase in inventories, since investments contracted by 3.7% y/y. Stocks grew mainly in manufacturing, likely to accommodate expected higher demand in the future. At the same time inventories in trade and agriculture decreased. Notwithstanding, investments in manufacturing, financial services, water supply and sewerage management, education and recreation were on the rise in Q2. The final consumption narrowed by 3.2% y/y in Q2, following 4.9% y/y decline in private spending. Government consumption rose by 4.2% y/y, mainly due to lower base effect. On the supply side, the economic growth was pulled up mostly by manufacturing as it expanded by 12.2% y/y, stimulated by a picking-up of external demand. Growth was also observed in transport and was also attributed to the revival of exports. Other sectors to expand in Q1 were financial intermediation and real estate, mining and power industry and social and personal service activities.

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