Hungary Investment Volume Drops 3.4% In Q3

  • 26 Nov 2015 12:00 AM
Hungary Investment Volume Drops 3.4% In Q3
Investment volume in Hungary was down by an annual 3.4% in the third quarter after rising by 5.7% in the second and falling by 3.9% in the first quarter, the Central Statistical Office (KSH) said. Third-quarter investments fell in all sectors with the exception of the property as well as business and the public administration, social insurance and defence sectors. In the latter sector, investments were boosted by border defence measures, KSH said. Investment volume in Q1-Q3 was down by 0.3% from a year earlier.

The drop came after a nearly 20% rise in Q1-Q3 2014.

In a quarter-on-quarter comparison, investment volume fell by a seasonally-adjusted 0.9% in Q3.

Overall investments in the public sector rose by 22.4% to 279 billion forints (EUR 891.3m), while investments in the private sector, including businesses employing at least five people, dropped by 7.6% to 683 billion forints.

Private sector investments rose by 13.6% in Q2, after a decline in Q1 interrupted seven consecutive quarters of growth.

ING Bank chief analyst András Balatoni said investments could decline next year, too, as the level of state investments falls with the drop in European Union funding.

He noted a lack of foreign investment in the private sector and said business confidence was low.

Takarékbank analyst Gergely Suppan said investment growth could pick up in Q4 because of a low base and the end of the 2007-2013 EU funding cycle.

He put full-year growth at 1-2%.

A pickup in home construction, supported by a possible drop in the VAT rate on the activity, will not be enough to offset the impact of lower EU funding next year, Suppan said, projecting a small decline in investment volume for 2016.

Source - Visit Hungary Matters to sign-up for MTI’s twice-daily newsletter.

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