Hungary industrial production likely to remain subdued in December, only slightly increase seen in 2017

Hungarian industrial production growth returned to positive growth in November following two months of decline. Data released last week showed Hungarian industrial production growth for November stood at 0.6 percent in both adjusted and non-adjusted terms.

After the data, Hungarian Economy Minister Mihaly Varga confirming a 2.1 percent GDP growth estimate for 2016, noting that risks could even be to the upside. Markets however, not impressed, the forint slipped later during the trading session with EUR-HUF rising above 308.00.

Despite a slight improvement compared to a 2.1 percent drop in industrial output seen in the previous month, the continued poor performance of industry suggests the economy is unlikely to meet the government’s target of 2.5 percent for full-year GDP growth.

Although confidence in industry increased both in November and December, a sharp decline in PMI and pauses in production at the Hungarian factories of German carmaker Audi suggest industrial production in December is likely to remain subdued. Industrial output is expected to slightly increase in 2017