New GDP data: Hungary in technical recession!
According to portfolio.hu, Hungary’s economy shrank by 0.4 percent in Q4-2022 compared to Q3. That means the GDP fell for the second time in Hungary. As a result, the country is currently in a technical recession.
Hungarian economy in recession
Portfolio.hu highlighted that the reason is the energy crisis siphoning away a considerable amount of money from Hungary. As a result, the households cut expenditures, which generates a decline in domestic consumption. Moreover, investment volume also falls.
Meanwhile, MTI, the Hungarian News Agency, wrote that Hungary’s GDP grew by an annual 0.4 percent in the fourth quarter, slowing from 4.0 percent in the third quarter on a “significant” decline in the farm sector, the Central Statistical Office (KSH) said in a first reading of data on Tuesday.
KSH said “many” branches of the national economy contributed to the growth, but “mainly” industry and market services. Within the industry, growth of the segments of the automotive and electrical system was “significant”, as well as the expansion in the real estate and logistics segments within services, KSH added.
Adjusted for seasonal and calendar year effects, Q4 growth was 0.9 percent. Quarter on quarter, adjusted GDP edged down 0.4 percent, falling for the second quarter in a row (this is the rate we referred to above). For the full year, GDP growth reached 4.6 percent. KSH will publish a second, detailed reading of the data on 2 March. Commenting on the KSH data, Economic Development Minister Márton Nagy said that Hungary’s economy had performed “excellently” in an economic situation burdened by the war in Ukraine and Brussels’s sanctions opposed by Hungarians.
The minister remained positive
Hungary’s 4.6 percent full-year GDP growth put the country in the top third of European Union member states last year when its economy produced the 6th highest growth since the post-communist transformation, the minister said in a statement. Among the four Visegrad Group countries, Hungary is a close runner-up after Poland, he added.
The outstanding results are backed by continued international confidence in Hungary’s economy, a permanently high level of foreign investment, high employment, one of the lowest unemployment rates in the EU, strong wage growth and targeted government measures, Nagy said. He reiterated the government’s target for GDP growth of “at least” 1.5 percent in 2023.
