GDP shrank only in Hungary in the EU in Q1; FM Szijjártó says new industrial capacities will give big boost

Hungary’s GDP stagnated in the first quarter compared to the same period a year earlier, a first reading of data released by the Central Statistics Office (KSH) on Wednesday shows.

GDP shrinked only in Hungary in Q1

Adjusted for seasonal and calendar year effects, GDP edged 0.4pc lower. KSH said services had a positive impact on GDP, while performances of the industrial and construction sectors weighed. In a quarter-on-quarter comparison, GDP inched down a seasonally- and calendar year-adjusted 0.2pc. KSH will publish a second reading of the data on June 3. According to portfolio.hu, GDP contracted only in Hungary among the EU member states.

Economy minister remains positive

National Economy Minister Márton Nagy said the government was working to to ensure the “biggest economic growth possible amid the negative external environment in Europe” in a statement issued by his ministry after the release of the data. He added that the government was drafting a budget that would counter the effects of the war, pointing to a tax reduction programme for families raising children and the Demján Sándor Programme for scaling up SMEs.

He said the financial burden of the war and the possibility of Ukraine’s future accession to the European Union were negatively impacting Hungary’s economic outlook. “As long as the war continues and sanctions remain in place, Europe and Hungary will pay the price of the war,” he added.

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150 new factories

Nagy said a scheme announced earlier to set up 100 new factories would be expanded to 150 manufacturing bases. He said a government-mandated cap on markups on some food products would be extended to groups of non-food products, too, boosting household consumption. Increasing construction sector output and demand in the tourism sector are a “positive sign”, he added.l

Nagy said the government was sticking to its plan to achieve the highest economic growth possible in 2025 and 2026.

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New industrial capacities to give Hungary’s GDP big boost, says FM Szijjártó

Hungary’s GDP will get a boost as big new industrial capacities are completed, Minister of Foreign Affairs and Trade Péter Szijjártó said in Budapest on Wednesday. In a statement issued by his ministry, Szijjártó said production at manufacturing investments by BMW and CATL would start this year, while construction of BYD’s factory was progressing “at full steam” and work on Mercedes’ second plant would soon enter “the final stretch”.

Answering a question at a press conference on a release of first-quarter GDP by the Central Statistics Office in the morning, he said Hungary’s GDP would grow “by leaps and bounds” when those plants started production. The impact of investment agreements signed in recent years will be apparent in GDP data in the coming quarters, I can assure everybody of that,” he added.