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The Hungarian economy is expected to grow by 4.3-4.4% this year, according to a conservative estimate, Finance Minister Mihály Varga said, commenting on the Central Statistical Office’s (KSH) fresh GDP growth report. In a first reading of data, KSH said Hungary’s GDP rose by an annual 4.9% in the second quarter of 2019. Varga said the economy was expected to perform well in the second half of the year, too. The economy has not lost momentum, he said, adding that the Q2 growth rate had exceeded the ministry’s expectations. The preliminary data indicate that Hungary registered the highest growth rate for the second quarter in the European Union, he said. The minister said KSH’s report was especially positive given that while economic output was up, public debt continued to decline. Varga said government measures, such as a six-year wage agreement with employers, improving competitiveness, home subsidies and government investments, raised economic growth by 1.6 percentage points. Growth is still being fuelled by household consumption, increasing export capacities and more efficient use of EU funds, he added.
Péter Virovácz of ING Bank said economic growth in Q2 was higher than expected by analysts, and surprising as monthly economic data from different sectors had been auguring a slowdown. In H2 the pace of growth could slow further and for the year GDP could grow by around 4.5%. Analyst Gergely Suppan of Takarékbank highlighted the role of foreign direct investments in boosting growth besides EU funds and domestic consumption. Government measures helping families and the economy could offset negative external effects in H2, leading to an average GDP growth rate of 4.8% for the year, he said.