The Minister of National Economy, Mihály Varga, announced that the recession in Hungary had stopped in a technical sense. New figures have justified the Government's earlier calculations, which showed that slower growth could be expected in the first half of the year, and that performance is likely to improve in the second half, he stated.

The Minister said that based on preliminary GDP data, recently published positive purchasing manager indices and improving consumer confidence, a further strengthening of economic performance may be expected. The Gross Domestic Product increased by 0.7 percent in the first quarter compared to the fourth quarter in 2012, decreasing by only 0.9 percent compared to the same period last year, which is much better than the previous forecasts. Government Spokesperson András Giró-Szász declared that the main task of the Government this year is to promote sustainable growth that can be maintained in the coming years.

The statements of the Minister of National Economy and the Government Spokesperson are also underpinned by both foreign and Hungarian analysts. JP Morgan's investment department analysts also announced that Hungarian GDP has grown in the first quarter of this year based on quarterly comparison. In line with the stronger than expected first quarter, JP Morgan significantly adjusted its forecast for this year and expects a 0.2 percent decrease as opposed to the previously estimated 0.7 percent. According to their forecast, the GDP will grow sequentially in each quarter, however, unfavourable Q4 2012 figures will probably hinder positive GDP data for this year. Furthermore, JP Morgan anticipates GDP growth of 1.5 percent for the whole of 2014. The Capital Economics research company also estimated GDP growth in the first quarter of the year and forecasts 1 percent GDP growth for next year.

Beside foreign analysts, Hungarian experts also indicated a growth in GDP. Adam Keszeg, an analyst at Raiffeisen Bank, said that the figure reflects a situation that is far better than suggested by previous first-quarter figures, adding that foreign trade and industry statistics for the first quarter were better than a year earlier, although they do not predict a surge in output. MKB analyst Zsolt Kondrat expressed that the fourth quarter of last year produced poor figures around the world and a first-quarter improvement had been on the cards. David Nagy, an analyst for K&H pointed out that the first quarter GDP figures were slightly better than previously thought. It was to be expected that the figure would be positive because retail trading was making a recovery and agriculture was also showing growth, he said.

15 May 2013

(Prime Minister’s Office)