Hungarian industry waddles, production fell significantly

Hungarian industrial output dropped by an annual 5.8 percent in November, after falling by 3.2 percent in the previous month, the Central Statistical Office (KSH) said on Tuesday.

Adjusted for the number of working days, output in November fell by 5.6 percent.

Declines were seen in most manufacturing sector branches, with the exception of the coke production, crude oil processing and the manufacturing of chemical materials and products segments, KSH said.

Month on month, output was 2.3 percent lower, based on seasonally and working day-adjusted data.

In the January-November period, output dropped by 4.8 percent year on year.

Commenting on the data release, the national economy ministry said the war in Ukraine and the European Union’s sanctions had caused serious damage to Hungary’s economy, but as a result of government measures and the improved international environment industrial production was expected to return to a growth path in the next few months. That prediction was supported by strong sentiment in the domestic and European processing industries and purchasing manager indices, the ministry said in a statement.

Recovering domestic demand and rising real wages, as well as an earlier-than-scheduled hike in the minimum wage and lower inflation would also have a positive effect, the ministry added. Lower energy and raw material prices would also help energy-intensive sectors, the statement said.

The government is working to ensure that GDP “again grows apace, by 4 percent” the ministry said, adding that it was necessary to increase domestic consumption through “the gradual removal of precautionary measures” while promoting labour market activities by boosting confidence and reactivating domestic production and investments.

In 2024, the government will extend its Széchenyi Card programme, increase the budget for the Baross Gábor Reindustrialisation Loan Programme to 1,200 billion forints, and increase the budget of the food supplier development programme by nearly 600 percent, the statement said.

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