KSH: state cut back its investments, foreign companies brought their money to Hungary

In the 1th quarter of 2022, the growth starting in the 2nd quarter of 2021 continued. The volume of investments increased by 8.7% compared to the same period of the previous year, and by 3.2% compared to the previous quarter (seasonally adjusted), the Central Statistical Office (KSH) said on Monday.

The brightening up of investment was driven by business developments and the increased activity of households, while the general government’s investments decreased. The seasonally adjusted investment volume of the reference period was slightly above its previous highest level recorded in the 3rd quarter of 2021.

In the 1st quarter of 2022, seasonally adjusted:

• The seasonally adjusted volume of the national economy’s investments increased by 3.2% compared to the previous quarter. Within it the seasonally adjusted volume of construction investments increased by 2.7%, investments in machinery and equipment grew by 6.0%

In the 1st quarter of 2022 compared to the same period of the previous year:

• The volume of investment activity increased by 8.7%. Within it construction investments representing 58% of the total volume of investments grew by 10%, investments in machinery and equipment representing 41% of the total value of investments increased by 7.0%. About seven-tenths of investment in machinery and equipment came from imports.

Among enterprises employing at least 50 people, realizing 54% of the investment performance, the volume of development increased almost by 11% compared to the low base, where developments of foreign-owned enterprises played a prominent role. At the same time, developments at budgetary units, accounting for 11% of investments, decreased by 13%. Local governments increased their tangible asset purchases, compared to the base period, while central government bodies decreased theirs.

Changes within investments over the reference period differ between sectors.

Developments in manufacturing, the largest investor, accounting for 29% of developments in the national economy, increased greatly, by close to 20%. Subsections performed differently. Among the three heaviest weighted fields, the significant performance increase of the manufacture of electrical equipment offset the huge decline in the manufacture of transport equipment, while developments in the food industry exceeded by 9.4% the same period of previous year’s level.

The performance of real estate activities, the second largest investor accounting for 22% of developments in the national economy increased significantly, by 11%, mainly due to the outstanding growth in the dominant residential construction sector.