Hungary’s economy grew dynamically in the third quarter of this year, a trend accompanied by steadily rising wages, and thus working people have been gaining more and more from economic expansion, Minister for National Economy Mihály Varga said, commenting on the latest (preliminary) GDP data released by the Hungarian Central Statistical Office (KSH).

Thanks among others to the economic stimulus generated by the six-year wage agreement of last November, the Ministry is expecting further improvement in employment, domestic demand and competitiveness, he added.

In his analysis of preliminary data showing GDP growth of 3.6 percent in the third quarter, the Minister remarked that this figure was already better than that of the previous quarter. As statistics on wage hikes and VAT revenues are pointing to an even more vibrant economy, final data are predicted to show even higher GDP growth, Mihály Varga noted.

Although the contribution of various economic sectors to overall growth will only be made public by the KSH in December, in light of currently available data one can conclude that expansion is mainly attributable to the industrial sector and the housing boom-fuelled construction sector as well as market services.

As the Eurostat has reported, the economy of the European Union grew on average by 2.5 percent year-on-year in the third quarter, according to data adjusted for seasonal and calendar effects. The growth rate of the Hungarian economy, 3.8 percent when data are adjusted for seasonal and calendar effects, is far higher than that of the EU, which signals that Hungary’s economic convergence process with highly developed member states has remained unbroken, the Minister stated.

Mihály Varga emphasised that the foundation of the Hungarian economy was firm, and growth was sustainable. The issues which the Government must work on in the future are the bolstering of competitiveness, the digitalization of the economy, the transformation of the vocational education system and incentives for assisting the re-entry of public work employees into the primary labour market.

The Ministry for National Economy is expecting the pace of economic growth to accelerate in the last quarter on the back of strong retail sales and robust consumption but a large number of projects are also scheduled to be completed by the end of the year, he said.

(Ministry for National Economy)