Hungarian industrial production growth accelerates in April, Q2 economic growth to remain strong

Hungary’s industrial production growth quickened to 7.8 percent year-on-year in April after falling 2.4 percent in the prior month. The working day adjusted figures came in at 2.9 percent year-on-year and 1.9 percent year-on-year respectively. The huge difference comes mainly from Eastern effect.  The un-adjusted year-to-date growth of industrial production came in at 3.8 percent year-on-year till the end of April. It appears that the industry will not be the biggest driver of Hungarian growth in 2018. In the March quarter, the industrial sector contributed just 0.5 percentage point to the GDP growth. Looking at the April print, it implies that the industry will not be substantially stronger in the second quarter either, noted KBC Market Research in a report.

As the construction continues to boom and the domestic consumption is solid which stimulates the market service sector, the second quarter economic growth is expected to stay around 4 percent year-on-year. Moreover, the accelerated use of EU funds money are aiding the economic growth.

“Taking in account a possible slowdown in the European economic growth, the Hungarian growth might slow-down below 3.5 percent YoY in 2019”, said KBC Market Research.

Furthermore, the inflation began accelerating in the last months and the May figure might be higher around 2.5 percent. Although this is mainly due to fuel price rise, prices are expected to go higher in the food products and services. Thus, inflation is expected to come in at around 3 percent year-on-year at the end of 2018.

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