Growth fuelled by consumption

I130904_GDP felhaszn oldali növ hozzájár_Q2 13_ENn Q2 2013 Hungarian GDP attained 0.5% volume growth in comparison to Q2 2012. In comparison to Q1 2013, GDP expanded by 0.1%, adjusted to seasonal and working day effects. As both figures are in line with KSH’s preliminary data, headline figures delivered no surprise. With respect to the structure of growth, however, a dramatic shift appears to have taken place: instead of net exports, domestic consumptions fuelled economic growth. In specific, contribution to growth by net exports was negative whereas domestic consumption contributed positively. The last time this occurred was in Q3 2008, hence right before the global financial crisis started.

On the production side, growth was created by agriculture and construction. Services attained a symbolic, 0.1% annual growth. Yet, only public services expanded whereas market services kept stagnating. The bad news is that industrial value added continued to decrease, although only by 0.8% year-on-year after -2.5% in y-o-y in Q1 2013.

In light of today’s data, we maintain our 0.3% annual economic growth forecast for 2013. In 2014, we predict 1.5% growth.