Hungary’s GDP growth in the fourth quarter of 2013 accelerated to 2.7 percent from 1.8 percent in the previous quarter, the Central Statistical Office (KSH) said on Friday. Speaking at a press conference late in the morning, Minister of National Economy Mihály Varga said the structure of growth had become more balanced and more sustainable. Following the announcement the forint strengthened against the euro, to trade at 309.20 on interbank market.
Emerging market analysts had previously put the annual rate at around 2.4 percent. Hungary’s GDP growth for the full year was 1.1 percent.
Minister Varga noted that growth was based on strong exports and improving domestic demand, supported by higher wages and utilities price cuts, not by credit.
He said all branches of the economy had contributed significantly to the growth, but highlighted the agricultural, industrial and construction sectors. The more than 10 percent growth in the construction sector was linked to investments, supported by government projects, the accelerated call-down of EU funding and private sector investments, he added.
Minister Varga said the Government would not amend its projection for 2.0 percent GDP growth this year for the time being, since at least one-quarter to five months of data were necessary before the projection could be reconsidered.
Gergely Suppán, senior analyst at Magyar Takarékszövetkezeti Bank, called the 2.7 percent GDP growth a seven-year record, adding expectation of a balanced-structure GDP growth of 2.2 percent in 2014. ING Bank analyst András Balatoni said Hungary’s economy performed substantial economic growth in two consecutive quarters last year and the outlook is favourable for this year as well, mentioning potential growth in the industry on the whole and construction industry within that, as well as of domestic consumption and investments. He said he expected this year’s GDP to grow between 2-2.5 percent. Erste Bank’s analysts expect a GDP growth of around 1.9 percent this year, fuelled primarily by a take-off in household consumption and investments.