Hungary Investment Volume Down 9.6% In Q1
- 31 May 2016 9:00 AM
Investment volume in Hungary fell by an annual 9.6% in the first quarter of 2016, the Central Statistical Office said. Investment volume fell after growing by 7% in the fourth quarter of 2015. Investment contraction was mainly due to the winding up of developments financed from European Union resources, which affected investments by central budget organisations to a larger extent. In areas less affected by this such as machinery investments, and in certain sectors such as manufacturing, the decline was more moderate.
Manufacturing sector investment volume was down by 3.6% from a year earlier. In 2015, investment volume growth was 0.6%.
In absolute terms, investments came to 5.582 trillion forints. Analysts interviewed by MTI said the investment contraction did not come as a surprise but said the extent of the decline exceeded expectations. Chief analyst of K and H Bank Dávid Németh noted that these were the weakest investment data of the past four years.
He said it was unfavourable that investment volume fell almost 5% in the business sector.
The question is whether this is a one-off decline in business-sector investments or if it will turn into a long-term trend, he added. Gergely Suppan of Takarékbank said investments could grow again in the near future with the establishment of new automotive capacities, which is supported by several business surveys.
Housing investments could contribute substantially to investment growth next year, he added. Suppan predicted ever slower decline in the remaining part of the year and investment growth of up to 5% or slightly more next year.
Republished with permission of Hungary Matters, MTI’s daily newsletter.
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