Hungary’s industrial sector struggling, no sign of improvement, recession may come again

Output of Hungary’s industrial sector fell 9.5pc in August, a first reading of data released by the Central Statistics Office (KSH) on Friday shows.

Adjusted for the number of workdays — of which there were two fewer than in the base period — output was down 4.1pc. KSH said output of most branches of manufacturing had declined in August, although output of three had increased, with the chemicals segment showing the biggest growth.

In a month-on-month comparison, output slipped 0.5pc, on a seasonally- and workday-adjusted basis. For the period January-August, industrial output declined 3.8pc year-on-year. KSH will release detailed data on output of industrial sector branches on October 15.

Commenting on the data, the National Economy Ministry said the economy as a whole was expanding, even though some sectors were performing well and others poorly. Hungary is in eleventh place among European Union member states in terms of GDP growth, and its economy is expanding at around 50pc over the EU average, it added.

It said the electricity, pharmaceuticals, chemicals and food segments

had grown in August and pointed to the impact of the weak performance of the German economy on the headline decline. According to 444.hu, Hungary may slide back into recession because of the low domestic consumption, the struggling industry and the underperforming agriculture.

Hungarians have cheapest, safest energy supply in Europe, says official

Thanks to the government’s utility price caps policy, Hungarians continued to pay the lowest prices in Europe for natural gas and electricity in September 2024, Szilárd Námeth, government commissioner in charge of the public utility cuts scheme, said on Facebook on Friday.

Natural gas is four times more expensive in Prague, three times in Warsaw, two and a half times in Bratislava and Bucharest than in Hungary, Nemeth said. In Stockholm, residents pay thirteen times more for natural gas than in Budapest.

As for electricity, Czech consumers pay four times more, Poles almost two and a half times more, Slovaks twice more and Romanians one and a half times more than Hungarians. Germans pay the highest electricity price in Europe, almost four and a half times more than Hungarian households.

Nemeth said the decision introduced in August 2012 successfully protected Hungarian families from the negative impact of the energy crisis caused by the war and the sanctions.

He said households were not obliged to take advantage of utility price caps, as they could also opt for market prices, “but nobody has ever taken that option so far”; not even those left-wing politicians who have constantly attacked and wanted to abolish the policy in the past twelve years. Opposition Tisza Party MEPs Peter Magyar and Gabriella Gerzsenyi also enjoyed the utilities price caps, that is why the Tisza party’s price-increasing utility price policy, “which serves the interests of America and Brussels, is hypocritical and lacks credibility”, Nemeth said.

Read also:

• Hungarian forint doing something unprecedented: further slip expected – read more HERE
• Orbán cabinet would build new dormitories, boost economy, review rental and Airbnb regulations in Hungary