Investments: a harsh setback in the business sector

151126_beruházások_ENAfter the encouraging, although uneven, upturn in Q2, the third quarter saw the return of negative investment growth by 3.4% year-on-year. Business investments were the main culprit, with a fall of 7.6%, and within them, declining manufacturing investments were the main drag, but investments decreased in other important economic sectors as well (agriculture, trade).

Despite the imperative of making use of the remaining EU funds under the aegis of the co-funded investment projects of the previous planning period, closing at year-end, apparently these projects could only play a limited role in keeping up the investment dynamism in the third quarter. Investments expanded by about 22% in the public sector (and within that, by 64% in public administration), and energy investments also rocketed in Q3, but investments in transport (a crucial sector that is heavily dependent on EU-funded projects) contracted by nearly 13%. Whether this will be levelled out by a strong upturn of EU-funded investments in the fourth quarter or no, is yet to be seen. At any rate, at this point, even our recently lowered investment forecast for 2015 (growth by 1.6%) may well err on the positive side.