Bad news came from the Hungarian economy again: industry in trouble

Output of Hungary’s industrial sector fell 7.2pc in September, a first reading of data released by the Central Statistics Office (KSH) on Wednesday shows. Meanwhile, retail sales in Hungary rose 1.7pc year-on-year in September, data released by the Central Statistics Office (KSH) on Thursday show

Hungarian economy overdependent on the German economy

Adjusted for the number of workdays, output was down 5.4pc. Output of most manufacturing branches declined in September, KSH said. Among the biggest, output of the automotive, electrical equipment, and computer, electronics and optical equipment segments decreased, but output of the food, beverage and tobacco segment increased, it added.

In a month-on-month comparison, output slipped 0.7pc, on a seasonally- and workday-adjusted basis. For the period January-September, industrial output declined 4.3pc year-on-year. KSH will release detailed data on output of industrial sector branches on November 13.

In a statement issued after the release of the data, the National Economy Ministry said the sluggish external economy, especially Germany’s troubled industrial sector, and weak external demand continued to weigh on Hungary’s industrial output. It pointed to growth in output of the food industry as a positive.

Illustration. The building of the new BYD plant near Debrecen. Photo: MTI

Hungary’s overdependence on the German economy shows the government’s policy of economic neutrality is the right solution, the ministry said. Hungary needs to strengthen further its economic ties with the East, where economies are growing at a much faster pace than in the West which is struggling with competitiveness problems, it added.

Local investments in the pipeline by CATL, BYD, BMW, SEMCORP and EcoPro can give new impetus to Hungary’s industrial sector, it said. Stimulus in the government’s New Economic Policy Action Plan is expected to boost consumption and investments, as well as industry, lifting GDP growth over 3pc in 2025.

Retail sales rise 1.7pc in September

Retail sales in Hungary rose 1.7pc year-on-year in September, data released by the Central Statistics Office (KSH) on Thursday show. Retail sales climbed at the same pace when adjusted for calendar year effects. Adjusted food sales increased 1.5pc, non-food sales rose 5.7pc and vehicle fuel sales fell 5.0pc.

Retail sales declined 1.4pc in a month-on-month comparison, adjusted for seasonal and calendar year effects. KSH noted that flooding during the period had impacted sales. In absolute terms, retail sales came to HUF 1,568bn in September. Food sales accounted for 49pc of the total, non-food sales for 36pc and sales at petrol stations for 15pc.

For the period January-September, retail sales rose an adjusted 2.7pc and an unadjusted 2.9pc from the same period a year earlier. Commenting on the data after its release, the National Economy Ministry said the month-on-month decline was in large part due to the flooding. It noted that retail sales had edged lower during a period of flooding in 2013, too, but had rebound afterward.

Consumer behaviour was unchanged and the domestic recovery continued in September, it added. The ministry said data from tills connected to the tax office indicated retail sales were strong in October, as in August.

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Featured image: illustration