Investment volume in Hungary rose by an annual 2.5% in the first quarter of 2021, level with the rate of growth in the previous quarter, the Central Statistical Office (KSH) said. Investments in machinery climbed by 7%, though construction investments edged down by 1.0%. In absolute terms, Q1 investments reached 1,979 billion forints (EUR 5.6bn). Construction investments accounted for about 53% of the total. Private sector investments dropped by 6.3 % to 1,055 billion forints, while public sector investments climbed by 30.6% to 260 billion. Manufacturing sector investments fell by 10.1%, construction sector investments jumped by 48.2% and investments in the commercial accommodations and catering sector increased by 12.8%. Investment volume started rising again in Q4, after three consecutive quarters of declines.
At the same time, decline in trade in services slowed somewhat in the first quarter but remained in the double digits, KSH said. Exports of services fell by an annual 24.6% to 4.277 billion euros, while imports dropped by 16.3% to 3.451 billion. The surplus in trade of services came to 826 million euros. KSH noted that the coronavirus pandemic continued to significantly reduce foreign trade in services. Contract work contributed around 319 million euros to Hungary’s surplus, while 317 million euros came in from tourism and 282 million from transport services.
Germany continues to be the most important foreign partner of Hungary with exchanges between the two accounting for 20% of total trade. The United States was in second place with 9.4% of total trade and Austria was third with 7.8% of the total. Business services accounted for 53% of service exports and 69% of service imports. The share of transport services was 25% and 23%, respectively.
Commenting on the data, Finance Minister Mihály Varga said Hungary’s 27% investment rate in the first quarter had been one of the highest in the European Union. The growth came mainly on the back of government spending and household investment, he said in a video posted on Facebook. Investments increased by 45% in the health-care sector, 33% in public administration, 31% in education, while investments in real estate were up 12%, he said. Varga said the data vindicated the government’s investment support scheme designed to offset the effects of the coronavirus crisis. Investments in Hungary are up 63% since 2010, three times the EU average investment growth rate, he said. The government expects its economic protection measures to continue generating investment growth, Varga said.