Hungary: Growth hits 14-year high in Q4
The Hungarian economy continued to fire on all cylinders in the fourth quarter. According to preliminary data released by the Hungarian Central Statistics Office (KSH) on 14 February, economic growth in year-on-year terms reached 5.0% in Q4, slightly above the second quarter’s 4.9% annual expansion and the strongest reading in over 14 years. The reading brings growth for 2018 as a whole to a multi-year high of 4.8% and above 2017’s 4.1% expansion .
Sturdy domestic demand remained in the driver’s seat in the quarter. Solid domestic sales fueled growth in industrial production, although the intensity of the expansion was limited by a marked cooling in the industrial sector in the EU. This was especially the case in Germany, which is the country’s main trading partner. Moreover, upbeat business sentiment and a buoyant construction sector suggest fixed investment expanded solidly, benefiting from growing inflows of EU funds. Meanwhile, retail sales recorded robust expansions in Q4, spurred by impressive wage growth and a tight labor market, although the pace of increase was lower on average than in Q3.
On a quarter-on-quarter, seasonally- and calendar-adjusted basis, GDP growth moderated from 1.3% in Q3 to 1.1% in Q4.
More detailed data will be released on 1 March.