According to the latest data by the Hungarian Central Statistical Office (KSH), in the last quarter of 2014 the volume of investments increased by 14.9 percent year-on-year. It has been since the first quarter of 2004, almost ten years ago, that a larger growth figure was recorded.

The significant, steady improvement observable over the past year has been underpinned by key sectors within the national economy and it signals that Hungarian economic expansion has been based on a sound economic structure.

In Q4 2013, investment in the construction, transport and storage as well as manufacturing sectors was up by 26.5 percent, 36.3 percent and 11.5 percent, respectively, in comparison to the level registered in the corresponding period of the previous year.

Investment growth in the fourth quarter was not the consequence of a low base in the previous year. Favourable interest rates and the Funding for Growth Scheme launched by the National Bank of Hungary, which is still available for enterprises, also added impetus to the investment rebound. Low interest rates coupled with benign inflation helped preserve the purchasing power of household incomes and boost consumption.

Construction sector investment, constituting a significant share of total investment within the national economy, soared 26.5 percent. The upward trend of construction sector investment has been confirmed by the latest figure, while the respective figure for the second quarter already exceeded 20 percent. The remarkable investment growth of 36.6 percent regarding the transport and storage sector constituted investment increase of some HUF 269bn. The manufacturing sector, the largest division within the national economy, recorded growth of 11.5 percent in the last quarter of 2013. In the observed period, investment was up in altogether thirteen sub sectors compared to data registered one year ago.

As far as annual changes are concerned, total investment growth was 7.2 percent in 2013, a figure which was unprecedented in the years preceding the economic crisis. On an annual basis, investment regarding machinery and equipment increased by 8.5 percent, while that of the construction sector was up by 5.9 percent. Investment concerning the manufacturing sector, the division of largest weight, gained 4.9 percent, thanks primarily to higher investment within the vehicle manufacturing and related supplier sectors.

(Ministry for National Economy)