In line with Government expectations – and according to the flash report of the Hungarian Central Statistical Office (KSH) – the Hungarian economy expanded by 0.7 percent compared to the previous quarter.

Consequently, technical recession is now over in Hungary. In comparison to the corresponding period of the previous year, Hungary’s GDP change is far more favourable than analysts have anticipated (who forecast negative growth of 1.25-1.3 percent), as preliminary data point to 0.9 percent contraction. These figures confirm the Government’s former calculations that predicted slow growth in the first half of the year and an increasingly improving one in the second. The KSH will publish final, detailed data only on 6 June 2013.

Quarterly GDP growth data can be attributable to several factors, the KSH release signals that the agricultural and construction sectors’ output increased compared to the same period of the previous year, and the performance of industrial sector also picked up in the first quarter. Compared to December 2012, the seasonally and workday-adjusted industrial production index was up by 2.9% in January, and further month-on-month growth was registered in February and March which was mainly a result of the positive performance of vehicle manufacturing.

Preliminary GDP data, the recently published positive PMI data and improving consumer confidence indicators all point to further economic expansion.

(Ministry for National Economy)