Dynamic investment growth has continued in Hungary: the 16.3 percent year-on-year increase in Q3 2014 marked the sixth consecutive quarter of growth. In the initial three quarters of the year, Hungary received investment of HUF 3400bn, up by 20 percent over the past one year. These data confirm that investment has contributed to Hungary’s economic growth in an outstanding manner.

The fact that investment increased in the majority of sectors within the national economy, altogether in fifteen of them, is an especially positive phenomenon. The main driver behind the strong growth observed in the third quarter was the 22.2 percent increase in machinery investment and the 12.2 percent growth within the construction sector. Investment activity within the manufacturing sector, the division with the largest weight, was also 10.8 percent higher. Suppliers of the vehicle manufacturing sector generated most of this growth; this shows that car industry enterprises active in Hungary had given significant impetus to growth through their supplier chains.

Besides impressive manufacturing sector investment growth, the volume of investment concerning transport and storage soared by 34 percent, thanks to dynamic infrastructure development projects. In addition to that, public administration investment jumped by 51 percent – due mainly to renovation of public buildings – while the indicator for the public utility services sector was 51 percent higher as a result of water purifying and sewage projects. In addition to the aforementioned sectors, in the third quarter of 2014 investment growth was 20 percent within the construction sector, 37 percent within the catering sector, 24 percent within the healthcare sector and 37 percent within the creative arts sector.

Broad-based investment growth have also been underpinned by factors such as the steady flow of incoming manufacturing sector orders, the efficient utilization of EU funding, projects realized through the Funding for Growth Scheme  as well as low interest rates. Increased production capacity generated by investment mainly boosts output at productive sectors and thus middle-term economic growth is also well established.

(Ministry for National Economy)