Second-quarter investment data published on Tuesday morning came as no surprise but were still disappointing, analyst told MTI. They do not expect investment volume to improve significantly over the coming quarters.
The Central Statistics Office reported on Tuesday morning that Hungary’s second-quarter investment volume decreased for the tenth-consecutive quarter in yr/yr terms, declining 4.9pc yr/yr in Q2 after falling 6.4pc yr/yr in Q1. Investment volume fell a seasonally adjusted 0.6pc from Q1.
Gergely Suppan of Takarekbank said the picture was mixed as investments started to rise in the manufacturing sector while are still sharply down in the property sector. The drop of second-quarter investment-volume data was disappointing even though the drastic decline in real-estate investment was anticipated, he said adding that he does not expect the latter to undergo rapid improvement. Mr Suppan noted that a change in Hungary’s VAT regulations prompted increased real-estate sales in the second quarter of 2009, thus creating a high base that contributed to the sharp fall this year.
The Takarekbank analyst deemed second-quarter manufacturing-industry data to be a positive sign for the future, adding that the decline in transportation and storage were, however, unexpected. Mr Suppan remarked that a few large investments such as construction of the Daimler plant in Kecskemet (C Hungary) served to improve the Q2 figures.
Gergely Suppan said that the future course of investment volume in Hungary depends largely on the capacity of the government’s New Szechenyi Plan to stimulate investment and the degree to which the new extraordinary banking tax acts to curb the possible positive effects of the latter.
David Nemeth of ING Bank portrayed Hungary’s H2 investment prospects as gloomy, remarking that flat investment-volume data would represent a positive result for the period. Mr Nemeth commented that large investments such as the Audi plant in Gyor (NW Hungary) and the aforementioned Daimler plant would boost investment next year, though an expansion of demand would be necessary to ensure a long-term increase in investment volume.
The ING Bank analyst said that investments made in the second quarter served an increase in exports but there is no more need for capacity expansion for the meantime. Investment is unlikely to rise significantly in Hungary over the coming quarters, particularly in the real-estate and construction sectors, he said.