In most European countries – contrary to the Hungarian data – there has been a substantial slowdown. As far as the EU 27 is concerned, the pace of expansion fell from 1.4 percent to 0.9 percent compared to the previous quarter. Economic growth moderated from 2.7 percent to 2 percent in Germany, whereas in the Czech Republic growth fell from 1.2 percent to 0.5 percent. In the region Poland has the best figures, as their growth rose to 4.3 percent after 4.2 percent in Q3.

According to historic data, the Hungarian economy has delivered a solid performance since Q2 2010, and despite the steadily deteriorating global economic developments GDP growth has been around 1.5 percent. The good news is that seasonally adjusted quarterly expansion was 0.3 percent which signals dynamics similar to the previous quarter’s.

Analyzing production, the greatest growth of almost 28 percent has been achieved by agriculture, and thus this sector added 0.9 percent to overall economic expansion. Despite the slowing global economy, the industrial sector has grown by 3.5 percent, a higher figure than in the previous quarter, which was primarily due to the improving performance of the processing industry. Therefore, this sector has contributed to growth by a similar extent like agriculture with 0.8 percent. Similarly to previous quarters, construction has had a negative impact, but the sector has now delivered its best result for a long time: its 1.4 percent contraction signals stabilization after negative growth of 10 percent and more during the previous corresponding periods. Consequently, primary and secondary sectors (agriculture, industry and contruction) added as a whole 1.6 percent to GDP growth. The service sector has also had a negative impact similarly to the trends of previous quarters: its 0.6 percent contraction resulted in a 0.3 percent weaker GDP figure. The biggest fall was registered in the field of financial, insurance and real estate services.

Analyzing consumption, household spending continued to grow in comparison to the previous quarter (by 0.1 percent), and therefore one can state that, due to the measures of the government aimed at boosting domestic demand, this sector shows no signs of weakness in spite of deteriorating economic conditions. Public consumption, however, continues to decline, and there are similarly negative trends in investment spending. Net export data has still been contributing to growth by the greatest extent, which is due to a relatively steadily expanding export sector and the less dynamically growing imports.

It is obvious, that despite deteriorating global economic conditions, Hungary has managed to deliver economic growth significantly higher than the EU average. As the detailed report implies, the engines of domestic economy show signs of recovery, but the main source of growth has still been foreign trade.

(Ministry for National Economy)"

Source: kormany.hu