Budapest, May 16 (MTI) – Hungary’s economy grew by an annual 4.1 percent in the first quarter this year, the Central Statistical Office (KSH) said on Tuesday.
According to seasonally and calendar-adjusted figures, growth in the first quarter was 1.3 percent compared with the previous one.
Analysts had expected the annual figure to be in the region of 3.5 percent.
Economy Minister Mihály Varga told a news conference after the data release that the first-quarter figure was “exceptionally good”, and driven by industry, the building sector and services.
He said the government expected the economy to expand by above 4 percent this year, and given the performance so far, there was no reason doubt the forecast. No analyst or bank had projected such a strong rate of growth, he added.
“Hopefully, credit rating agencies and international organisations will also review their data on the Hungarian economy in light of the current favourable results,” he said.
Adjusted for calendar year effects, first-quarter GDP grew by an annual 3.7 percent.
Both the adjusted annual growth rate and quarterly growth were the highest measured since Q1 2015.
Industry and construction sector saw fast expansions, partly due to a low base, KSH statistician Zsuzsanna Boros Szőke said. Growth in the construction sector increased by 24.7 percent in Q1 this year, after contracting 27.6 percent a year earlier, she said.
This year’s growth likely reflected EU funding, she added.
Within industry, growth rates were high in the manufacturing sector, more specifically in vehicle manufacturing, computer, electronic and optical products manufacturing as well as in the pharmaceuticals sector, the KSH statistician said. Growth in agriculture was mute, however.
Analysts told MTI that better than forecast Q1 data may prompt them to revise their 2017 and 2018 growth forecasts upwards.
K and H Bank analyst Dávid Németh said this year’s GDP growth could reach 3.7 percent.
Gergely Suppán of Takarekbank said Q2 growth could be slower as a result of a stronger base and fewer working days but the pace could accelerate again to exceed 4 percent as a result of the weak third and fourth quarters last year, as well as investment and consumption, pick up.
The scale of the rise after last year-end’s weakness was unexpected and could reflect stronger performance in the industrial sector and its effect on exports, leading ING Bank analyst Péter Virovácz noted.
The pace reflected both stronger performance and a low base, Erste Bank leading analyst Gergely Urmossy said.
KSH will publish a second reading of Q1 GDP data on June 7.