In the third quarter of this year, Hungary’s GDP grew by 3.2 percent year-on-year – in line with prior estimates. In comparison to the previous quarter, the economy expanded by 0.5 percent. Every sector has contributed to growth and with this result Hungary remains one of the top performers within the EU.

On the production side, despite a high base agricultural output increased significantly, by 10.8 percent. Due to steady foreign demand within the car industry and increased capacities, industrial output gained 5.6 percent, while the 11.6 percent output growth within the construction sector was a result, among other factors, of the better utilization of EU funding. The services sector has also contributed to growth, as favourable tourism data, outstanding retail sales and the performance of the transportation sector have all fuelled expansion.

On the expenditure side, the 13.2 percent increase of investment volume was an especially positive phenomenon, which was the consequence of construction sector output growth, the rebound in the building of homes, EU funding, low interest rates, the Funding for Growth Scheme and the recovery in private sector activity. The substantial and steady increase in investment volume is an especially positive sign as capital expenditure is seen to underpin economic growth in the short as well as in the long term.

Stable and steady growth indicates that the negative economic effect of one-off events, such as the embargo against Russia and production breaks in the summer, was far more muted than it had been feared.

The accomplishment of Hungary’s economy was remarkable also from a regional perspective as the country remained one of the EU’s top performers. In light of data adjusted for seasonal and calendar effects, the 3.1 percent growth of the Hungarian economy is well above the 1.3 percent average recorded within the EU28. Hungary is also in a good position in terms of quarterly data: according to a Eurostat flash report, Germany’s GDP growth was practically flat (+0.1 percent), while the compound GDP of the EU28 was 0.3 percent higher in Q3 2014, in comparison to the previous quarter. Thus, Hungary’s growth of 0.5 percent exceeded the EU average also on a quarterly basis.

Thanks to favourable third quarter statistics, this year’s growth may exceed the official GDP growth estimate of 3.2 percent predicted by the Ministry for National Economy in autumn 2014.

(Ministry for National Economy)