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Investments in Hungary rise by 26.8 pc from low base in Q2

Investments in Hungary rise by 26.8 pc from low base in Q2

Investments in Hungary rose by an annual 26.8 percent in volume terms in the second quarter of 2017 from a low base one year earlier, the Central Statistical Office (KSH) said on Thursday.

KSH noted that, similar to the previous quarter, growth was strong and affected nearly all branches. Business investments expanded and the realisation of projects launched under the 2014-2020 EU funding cycle also gathered momentum, it said.

Investments rose by a seasonally adjusted 6.3 percent from the first quarter of 2017.

First-half investments were up by an annual 25.4 percent.

Analysts expect the rapid rise to continue in the remainder of the year, partly as the utilisation of EU funding gathers pace.

K and H Bank leading analyst Dávid Németh noted the low base and the decisive role of EU projects behind the rapid rise. The pace could reach 20 percent this year but could slow to 10 percent in 2018 and even a contraction may follow unless market-based investments start to expand.

Gergely Suppán of Takarékbank said investment growth could well exceed 20 percent in 2017 and projected two-digit growth for 2018 as well.

As we wrote on Monday, Hungary’s government has raised the capital of the Széchenyi Investment Fund (SZTA), an EU-supported venture capital fund established by the state to invest in SMEs, by 8 billion forints (EUR 26.3m) and extended its run.

Source: MTI

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