Hungary’s GDP grew by an annual 2.7 percent in the second quarter, slowing from 3.5 percent in the previous quarter, the Central Statistical Office (KSH) said this week in a first reading of data. Analysts polled by Portfolio.hu had put the increase at 3 percent.
KSH attributed the growth to industrial output and blamed the slowdown on the farm sector. GDP growth was the same adjusted for calendar year effects, but adjusted for seasonal effects as well growth was 2.4 percent, down from 3.2 percent in the first quarter. In a calendar year- and seasonally-adjusted quarter-on-quarter comparison, GDP growth reached 0.5 percent in the second quarter, edging down from 0.6 percent in the first quarter.
K&H Bank chief analyst Dávid Németh said the fresh data augur growth under 3 percent in the third quarter and the fourth quarter, too. Takarékbank analyst Gergely Suppan noted that a number of harvest data are still not known, which could result in a possible revision of GDP data later. He added that growth could pick up in the second half because of a weak base, impacted by the phase-out of two models at Japanese carmaker Suzuki’s Hungarian plant.
The opposition Socialists said slower-than-expected growth in the second quarter shows that Hungary’s economy is slowing and ruling Fidesz has no plans on how to reanimate growth. Even Romania’s GDP growth is one percentage point higher, which is “a great shame for Viktor Orbán’s government”, the party said. The government’s only idea for growth stimulus is to “beg for money from the EU”, while Fidesz politicians are lining their pockets, it added.
Péter Benő Banai, state secretary for public finances at the Ministry of National Economy, said an economic growth projection of around 3 percent is still realistic for 2015, supported by favourable internal and external developments. Benő Banai said KVH’s 2.7 percent projection was below the economy ministry’s expectations but it is a first estimate that could still change. Agricultural output could have fallen in the second quarter from last year’s high and this explains the lower than expected projection, he added.
Benő Banai said the 3.1 percent GDP growth in the first half of 2015 is favourable in international comparison. The European Commission had calculated 1.8 percent growth for the whole of the European Union.
