Hungary’s GDP growth speeds up to 2.7% y/y in Q4 2013, matches flash estimate.

By bne IntelliNews March 6, 2014

Hungary’s GDP grew by 2.7% y/y in Q4 2013, speeding up from a 1.8% y/y rise in the previous quarter, the statistics office said on March 5, confirming the flash estimate released on February 14. The seasonally and calendar adjusted data showed GDP increasing by 0.5% q/q in Q4, slowing down from a 0.8% q/q rise in Q3.

The strong performance of Hungarian economy in Q4 pushed the full-year GDP up by 1.1% y/y in 2013, recovering from a 1.7% y/y decline in 2012. The value of the GDP calculated at current prices stood at HUF 29.114tn (EUR 93.94bn) for the year, corresponding to HUF 2.94mn per capita.

On the supply side, the agriculture output increased by seasonally and calendar adjusted 22.2% y/y in Q4, which was due to better harvest as well as low base effect. The sector contributed with 0.8pps to the GDP growth in the quarter. The construction sector increased by 10.4% y/y, on the back of better performance in both construction of buildings and the civil engineering segment. The growth in Q4 speeded up from 7.6% y/y in Q3 and contributed by 0.4pps to the quarterly GDP growth.

Industry expanded by 3.3% y/y in Q4, growing for the second quarter in a row after declining in the previous five quarters. The manufacturing industry grew by 5.1% y/y in Q4, speeding up from 1.8% y/y in Q3 on the back strong performance of the manufacture of transport equipment and fabricated metal products. The industry contributed by 0.7pps to quarterly GDP growth.

The gross value added of services sector picked up 1.3% y/y in Q4, after stagnation in the previous quarter. Within services, all sectors saw annual increase with the exception of financial and insurance as well as real estate activities. The service sector had also a positive 0.7pps contribution to GDP growth.

On the demand side, gross capital formation increased by 1.3% y/y, as investments registered a 10.4% annual growth in Q4. Gross capital formation contributed with 0.3pps to the GDP growth in Q4, although lower than in the previous quarter (+0.7pps). Consumption increased by 1.2% y/y, driven by a 5.7% rise in government consumption and a 0.5% y/y rise in private consumption. Consumption has a positive 0.9pps contribution to the GDP growth in Q4. Net exports had a positive 1.5pps contribution to the GDP growth in the period as well, after exports increased by 8.8% y/y, faster than imports’ growth of 7.6% y/y.

In regional comparison, Hungary’s seasonally adjusted GDP (2.8% y/y) performed better than the eurozone (0.5% y/y), Eurostat said. The Czech GDP advanced 0.8% y/y in Q4 and Poland witnessed a strong 2.2% y/y GDP growth as well. Hungary’s main trade partners, Germany and Austria saw their economies growing by 1.4% y/y and 0.5% y/y, respectively in Q4, Eurostat data showed.

Hungary’s government sees GDP growth accelerating to 2% y/y in 2014. This projection is in line with the expectations of the OECD. The European Commission projected in February a 2.1% y/y rise for Hungary, revising up its previous estimate for a 1.8% y/y growth. The World Bank and the EBRD forecast in January a 1.7% y/y GDP growth this year.

GDP, constant prices     2011         2012         2013    
  Q1 Q2 Q3 Q4 Q1-Q4 Q1 Q2 Q3 Q4 Q1-Q4 Q1 Q2 Q3 Q4 Q1-Q4
Y/Y change, unadjusted data 2.5 1.3 1.3 1.3 1.6 -0.6 -1.6 -1.7 -2.7 -1.7 -0.8 0.5 1.8 2.7 1.1
Q/Q change, seasonally and calendar effects adjusted data 1.1 -0.1 0.0 0.3 - -1.4 -0.4 -0.3 -0.5 - 1.1 0.3 0.8 0.5 -
                          Source: KSH

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