Preliminary data show that in the third quarter of the year Hungary’s GDP increased by 2 percent compared to the corresponding period of the previous year. The agricultural and services sectors were the main drivers of expansion.

Reports on the autumn harvest indicate output growth of more than 10 percent, a figure similar to that of Q2. The steady increase in market services was attributable to wage and employment growth as well as subdued inflation. The weaker performance of the industrial and construction sectors was the consequence of transitory effects. Summer holidays and lacklustre external demand have caused the deceleration of motor vehicle output. The construction sector posted quarter-on-quarter growth, and the Housing Allowance Programme is expected to underpin this sector in the future.

The Government-initiated reduction of payroll taxes may give additional impetus to the economy as of 2017. Lower employer contributions and a higher minimum wage are seen to boost wages in Hungary. This is expected to stimulate jobseekers, reduce the number of vacancies and fuel consumption.

(Ministry for National Economy)