After years of growth, investments decreased in Q1

In the first quarter of 2020, the volume of investments dipped by 1.8 percent, the first negative year-on-year growth rate since the beginning of 2017.

It is unlikely that the coronavirus crisis had a formative role in this negative growth. In fact, on a quarter-on-quarter basis, the seasonally adjusted investment volume already decreased in the last quarter of 2019 – this downward trend continued in the first quarter of this year.

While investment decreased in the majority of economic branches, the investments of medium and large firms actually were up 4 percent. The fact that manufacturing investments were up 1.1 percent – despite falling automotive investments – clearly helped, due to the outstanding weigh of manufacturing within overall business investments. Also, investments rose strongly in real estate development, another important area.

On the other hand, public investments dropped by 17 percent. Instead of the virus crisis, it is likely that the completion of various projects co-funded by the EU was an important factor behind falling public investments.

The impact of the pandemic is bound to become more spectacular in the coming quarters. On the whole, we expect investments to decline by 5-10 percent in 2020.