Distressing figures: Hungarian GDP falls sharply in 2023
The Hungarian economy was 0.8% weaker in 2023 than a year earlier, the Hungarian Central Statistical Office (KSH) reported. Performance stagnated in the last three months of the year.
Adjusted for calendar year effects, GDP rose by an annual 0.4% in Q4. For the full year, adjusted GDP dropped by 0.8%.
KSH said the performance of the economy rose mainly in the farm, healthcare, social services and ICT sectors. That growth was countered by declines in the industrial and construction sectors, and part of market services, mainly trade, it added.
Quarter on quarter, GDP was flat, adjusted for seasonal and calendar year effects.
Commenting on the fresh data, Economy Minister Márton Nagy attributed stalled growth mainly to weak external demand, noting the recession in Germany and stagnation across the European Union. He added that “extraordinarily high” real interest rates had also negatively impacted GDP by giving businesses an incentive to save rather than make investments.
Sustainable and speedy economic growth cannot be achieved without a healthy credit market, he said.
Nagy said signs of improvement in the economy were already visible, noting data indicating a pickup in retail sales and tourism in recent months. State-subsidised lending schemes and a voluntary programme among commercial banks to offer businesses favourable lending rates could accelerate the recovery on the credit market, he added.
Achieving GDP growth of 4% in 2024 is a “priority” goal for the government, the minister said.
In a video message posted on social media after the release of the data, Finance Minister Mihály Varga said Hungary’s GDP growth could reach 3 to 4% in 2024, supported by disinflation, rising real wages, stronger consumption, exports and investments, and record employment levels.
The European Commission expects Hungary could be “among the frontrunners” in terms of GDP growth in the EU, he added.
While domestic factors are reason for confidence, external factors justify caution, Varga said, pointing to shortages of raw materials and fixtures caused by the war in Ukraine and conflict in the Middle East, as well as the German economy’s weakening.
“This situation requires solidifying the balance and cautious planning,” he added.
The government will continue to reduce budget deficit and state debt levels, while putting the economy on a sustainable growth path in 2024, said Varga
Construction sector also down
Output of Hungary’s construction sector in December last year dropped by an annual 4.3%, the KSH said on Wednesday.
Output of the buildings segment fell by 6.0% while civil engineering output edged down 0.5%.
In absolute terms, construction sector output was worth HUF 882 billion (EUR 2.8 billion) in December last year. The buildings segment accounted for 66% of the total.
Month on month, construction sector output rose by 5.1%, adjusted for seasonal and working-day effects.
Construction sector output fell by 5.0% in 2023 compared to 2022.
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1 Comment
It’s CALLED a RECESSION – in “other” country’s – DEMOCRATICALLY Governed
Victor Orban & Mihaly Varga – do they have a PRONUNCIATION problem of this WORD ?
Orban & Varga – years are gathering in NUMBER – that clearly GROW in giving this FACT – that Hungary is a RECESSIONAL economy.
Hungary – the TASK to remove this FACT is gargantuan.
The question is – if Hungary has factually been in an Economic recession for some years and KNOWINGLY the pressurization that continues on Hungary, it’s recessed Economy and declining Financial status – the END to this “Horrific” picture, what is going to be the END picture – left of Hungary ?
It ALL will WORSEN.
Citizens of Hungary are being Destroyed / Damaged growing rapidly in number NOW, not forgetting in PRIOR years, especially post February 2020, the opinion that it’s ALL – in Hungary “trending” on-going building downwards, that will result in, represent, a Financial & Economic cataclysmic DISASTER.
Orban & Varga – study carefully what they TALK as it AGAIN – be “veiled” in Truth & Fact.