Analysts told MTI following the publication of second-quarter GDP and July industrial-output data on Wednesday morning that they see increasing risks to Hungary’s GDP and industrial-output growth.
The Central Statistics Office reported that Hungary’s GDP grew an unadjusted 1pc and workday-adjusted 0.8pc yr/yr in the second quarter and was unchanged from the first quarter.
Zoltan Arokszallasi of Erste Bank and Gergely Suppan of Takarekbank both commented that exports generated Hungary’s second-quarter GDP growth, noting that domestic demand has not increased. Messrs Arokszallasi and Suppan said that they do not expect a significant surge in domestic demand. The Erste Bank and Takarekbank analysts warned that global growth-risks have increased, which jeopardizes Hungary’s future GDP growth as well.
Gergely Suppan remarked that industrial and shipping output underpinned Hungary’s second-quarter GDP growth, while construction- and agricultural-sector output were, as expected, poor during the period. Mr Suppan noted that the third-quarter GDP base will be low as a result of the dampening effect of austerity measures on economic growth in Q3 of last year.
The Central Statistics Office also reported on Wednesday morning that Hungary’s industrial output fell a seasonally and workday-adjusted 1.1pc in July from June, rising an unadjusted 9.0pc and workday-adjusted 11.5pc in the twelve months to July.
Zoltan Arokszallasi said that Hungary’s month-on-month drop in July industrial output could have been the result of a regular fall in summer production and thus does not necessarily indicate the onset of a declining trend.
Gergely Suppan cautioned that Hungary’s export prospects have deteriorated, thus placing industrial output at risk. Mr Suppan added that major investments, notably Hankook’s expansion of its tire plant in central Hungary, will serve to buttress industrial output.