The latest figures of the Hungarian economy tell a different story than PM Orbán
PM Viktor Orbán recently stated in an interview that the anticipated rapid take-off of the Hungarian economy, originally expected on 1 January, had been postponed to 1 July. He admitted to an error regarding the dates, but insisted the economic upswing itself remained unchanged. However, the latest figures tell a different story: both construction and industrial output declined in August, proving his assertion incorrect once more.
Construction sector output falls
Output of Hungary’s construction sector dropped 15.2pc year-on-year in August, data released by the Central Statistics Office (KSH) on Tuesday show. Construction sector output declined 13.6pc when adjusted for the number of workdays. Output of the buildings segment slipped 2.3pc and civil engineering output plunged 34.8pc.
In absolute terms, construction sector output reached HUF 562.8bn in August. The buildings segment accounted for 70pc of the total. In a month-on-month comparison, construction sector output dropped 11.4pc, adjusted for seasonal and workday effects. Order stock was up 17.7pc at the end of August compared to twelve months earlier. Buildings segment orders fell 10.4pc but civil engineering orders jumped 35.7pc.
New order volume surged 123.1pc during the period on the back of transport infrastructure contracts. New orders in the buildings segment dropped 8.0pc but new civil engineering orders climbed 245.2pc. In January-August, output of the construction sector inched down 1.3pc from a year earlier.
Struggle of Hungarian economy continues: industrial output also falls
Output of Hungary’s industrial sector fell 7.3pc year-on-year in August, the Central Statistics Office (KSH) confirmed in a second reading of data on Tuesday. The detailed data show output of the automotive industry, Hungary’s biggest manufacturing sector, fell 20pc year-on-year in August. The segment accounted for 20pc of manufacturing output during the month.
Output of the computer, electronics and optical equipment segment, accounting for 13pc of manufacturing, climbed 17.4pc. Output of the electrical equipment segment, which made up 11pc of manufacturing output, fell 9.4pc. Output of the food, drinks and tobacco segment, generating 17pc of the sector’s output, slipped 3.3pc.
Headline output fell 4.6pc when adjusted for the number of workdays. In a month-on-month comparison, output declined a seasonally- and workday-adjusted 2.3pc. For the period January-August, output dropped 3.9pc year-on-year.
Export sales volume, which accounted for 64pc of total sales, fell 2.4pc and domestic sales declined 4.1pc. Order stock of manufacturing sector branches that KSH tracks was down 4.3pc at the end of August from twelve months earlier. New order volume fell 4.6pc, as new domestic orders edged up 1.3pc but new export orders slipped 5.6pc.
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Hopefully fewer Hungarians were fooled this year by Orban’s predictions of “A Golden Age”. The Hungarian economy is a disaster. The one sector which was up is civil engineering and that is all government projects financed by state debt which will be a millstone around the necks of taxpayers for such things as the useless Budapest-Belgrade line that does not stop in any major Hungarian city along its’ route. Depressing is the 3.3% decline in the food, beverages and tobacco sector which tells you that people are going hungry.