Hungary trade gap increase shrinks in Sept, but...

Gyula Tóth, BA-CA, Vienna

“Despite the favourable headline, September trade data strengthens our view that the favourable sideways trend which characterized import developments until May this year has clearly broken down."

“[...] with inventory levels now run down, import growth is now picking up again. This means that we see a good chance that firm export growth will be increasingly matched by firm import growth, something which will probably boost the deficit in the coming months."

Ivailo Vesselinov, DrKW, London

“The outcome was largely due to robust export growth, which reached nearly 13% yoy, outpacing imports (up 9% yoy), which were partly down due to favourable base effects."

“On a note of caution, however, the central bank has continued to insist that the current figures underestimate imports due to recent methodological changes, which suggests that revisions could be forthcoming in the medium term."

“For the time being, however, it should be noted that the cumulative trade gap for the first nine months of the year has reached EUR 2 bn, some 26% lower than the deficit over the same period in 2004."

“The continued robust performance of exports is set to provide some underlying support to the forint."

Source: portfolio

Click here for the source!