In Q4 2015, Hungary’s GDP grew by 3.2 percent year-on-year, while in 2015 the economy expanded by 2.9 percent. The government debt-to-GDP ratio, 75.3 percent, was also below prior estimates, down by 1 percentage point compared to the level of 2014.

According to detailed data from Q4 2015, GDP growth has accelerated, driven by various factors. On the one hand, the disbursement of EU funding was faster at the end of last year, and on the other hand since the second half of 2014 persistently low oil prices had been fuelling domestic demand through multiple channels. Industrial output was another key contributor to GDP growth.

As in the period Q1-Q3, the agricultural sector was a negative factor also in the last quarter of 2015. Among productive sectors, industrial output grew by 7.2 percent, thanks to the expansion of car industry production capacities. In addition to the motor vehicle manufacturing and related sub sectors, electronic and metal product manufacturers have also added to growth. Tourism also posted remarkable growth (the number of tourism nights was up by 5.4 percent last year), while the volume of retail sales increased by 4.7 percent year-on-year in the final quarter of 2015.

The demand side continued to be characterized by balanced growth. Consumption grew dynamically, by 3.5 percent, while the volume of investment posted impressive growth of 6.5 percent.

GDP data in 2015 are pointing to a stable and balanced growth structure. Growth has been based on multiple pillars: on the demand side, the volume of exports and household consumption showed significant gains (8.4 percent and 3.1 percent, respectively), while on the production side the industrial and services sectors grew by 6.3 percent and 2.8 percent, respectively.

Hungary’s GDP growth continued to beat the EU average.

The country’s positions of external and internal balance have also improved: the foreign trade sector posted a surplus last year of EUR 8.1bn, up by HUF 1.8bn compared to 2014.

In 2016, the Hungarian economy is expected to continue to grow and the general government debt-to-GDP ratio is seen to fall. Government measures may substantially offset the cyclical slow-down due to the schedule of EU transfers. The Ministry for National Economy maintains the 2.5 percent GDP growth estimate for this year.

(Ministry for National Economy)