The governement says that GDP data in line with expectations

According to the final estimate of the Hungarian Central Statistical Office, in the third quarter of 2012 gross domestic product, as formerly anticipated, declined in Hungary by 1.5 percent in comparison to the corresponding period of the previous year; compared to the previous quarter the contraction was 0.2 percent. Regarding the initial three quarters of the year, the economy posted negative growth of 1.3 percent in comparison to the same period of 2011. The entire European economy has been facing tough challenges and that is aptly reflected by international data which signal that the EU’s GDP declined by 0.4 percent.

The Hungarian economy could still not detach itself from the growth path manifested basically by international trends, but weak agricultural performance due to bad weather has also adversely affected Hungarian growth.

Analyzing the production side it can be concluded that the decline is attributable to the greatest extent to the agricultural sector, where contraction was quite significant with 21.4 percent. The outstandingly high figure was the result on the one hand of losses due to draught and of the high basis last year on the other. As a consequence, agricultural performance brought down the GDP figure for the entire economy by 1.1 percent. Industrial performance was lower by 0.2 percent compared to the same period of the previous year, motor vehicle manufacturing within the sector, however, continued to expand as a result of recently completed investments. In contrast to the previous couple of quarters, the construction sector managed once again to record growth.

Growth in this segment amounted to 2.3 percent primarily due to road construction and the renovation of main railway lines which as a whole added 0.1 percentage point to the final GDP figure. Added value in the service sector declined by 0.7 percent thus contributing -0.3 percent to the GDP. Within this, the financial and insurance sub sectors suffered the largest loss with 3.9 percent, whereas the information and communication sub sector gained most where added value increased by 3.7 percent in comparison to the corresponding period of the previous year.

With regard to demand side it can be observed that consumption expenditures of households decreased by 3.9 percent, while those of the public sector was higher by 1.4 percent. In comparison to the previous quarter decline concerning gross fixed capital formation was smaller, but investments increased impressively in several sectors of the national economy (such as, among others, motor vehicle manufacturing or the manufacturing of machinery and equipment). The largest single positive contribution continued to come from net exports. Exports registered growth of 1. 9 percent, while imports declined by 0.7 percent.

According to Eurostat data the EU has been performing sluggishly: the GDP of the union is well below that of the global economy. This phenomenon has been due partly to the protracted debt crisis and partly to high debt levels. Having reduced its debts and budget deficit, Hungary has entered a sustainable path which has in store short-term growth risks but favourable growth impulses in the medium-term resulting from these crucial measures.

(Ministry for National Economy)