Industrial production has decreased in Hungary: the NGM urges the reduction of German dependence

By: Trademagazin Date: 2024. 11. 06. 12:19

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According to the latest data of the Central Statistical Office (KSH), adjusted for calendar effects, industrial production in September 2024 was 5.4 percent below the level of the previous year, while it decreased by 0.7 percent compared to August. The performance of the industry continues to be hampered by external demand, especially the weakening of the German economy, although the food industry showed a small annual growth.

The announcement of the Ministry of National Economy (NGM) points out that Hungarian industry is too dependent on the German economy. According to the ministry, economic neutrality, i.e. reducing external exposure, can be the solution to this dependence. In addition, it was emphasized that, in addition to the western markets that are struggling with competitiveness, Hungary should also expand its economic relations towards the eastern markets that show faster growth.

According to ING’s quick analysis, the small growth registered in the summer period also indicates the weakness of basic industrial processes. The analysis showed that the volume of Hungarian industrial output is currently 4.8 percent below the average monthly output in 2021, which is a level not seen since the post-Covid shutdowns.

The August data also showed a gloomy picture: industrial production, adjusted for the working day effect, was 4.1 percent lower than a year earlier and decreased by 0.5 percent compared to July. NGM believes that these data reinforce the strategy that the country’s economic relations should be more balanced in order to mitigate the risks arising from the slowdown of external economies, especially Germany.