Economic Trends 2024/2 out now

The OECD’s global growth forecast moved up, to 3.1% for 2024 and 3.2% for 2025 with monetary policy still expected to be the main obstacle to growth. Global trade growth decelerated to just 0.3% in 2023, and it is likely to remain moderate – about 3% – in 2023-2024. The growth prospects are clouded by weak consumption demand in China, the USA and the EU. In the first quarter of this year, the combined GDP of the EU13 countries only grew by 1.5% annually, a disappointing outcome. In Hungary, after stagnating at the end of 2023, the economy was up 0.8% on a quarterly basis and 1.1% compared to the same quarter of last year. While there was an upturn in consumption, the positive GDP growth was only possible because of the positive contribution of net export, the report says. Read the full report here.

	2023 Fact	2024 Forecast	2025 Forecast
GDP	-0.9%	1.7%	3.2%
Gross Fixed Capital Formation	-7.4%	-2.2%	4.6%
Industrial Production	-5.5%	-1.5%	5.0%
Gross Salaries	14.2%	13.2%	8.3%
Unemployment Rate*	4.1%	4.3%	3.7%
Current+Capital Account**	1.2%	2.3%	3.0%
General Government**	-6.7%	-5.5%	-5.0 %
Consumer Price Index*	17.6%	4.0%	3.8%
MNB Base Rate***	10.75%	5.5%	5.0%
10-Year Yield***	5.86%	6.5%	6.0%

*annual average **in % of GDP ***at year-end

03.09.2024. GDP: amid consumption expanding further, the fall in investments accelerated in Q2

The second estimate confirms that the unadjusted GDP was up 1.5% in the second quarter of 2024, while the seasonally and calendar-adjusted GDP volume climbed 1.3%. Compared to the previous quarter, by contrast, the GDP contracted by 0.2%.
On the expenditure side, the growth was still mainly supported by private consumption, which grew at a slightly accelerated rate of 4%. Fixed capital formation, on the other hand, fell by more than 15%, up from 7% in Q1. Nevertheless, overall final domestic use was up 0.7%, following six quarters of continuous decline, due to a surge in inventories. Despite this modest growth, import continued to fall, even if at a much slower pace. Thus the positive growth contribution of net exports weakened considerably in Q2.
On the production side, economic growth was still mostly driven by services. Industrial outputis still on a decrease and agricultural output started to contract as well.
On the expenditure side, the change in inventories will probably support growth, alongside consumption, but the growth contribution of net exports is likely to become negative in the second half of 2024.

30.07.2024. GDP growth numbers far below expectations

According to the first estimate, unadjusted GDP was up 1.5% only in the first quarter of 2024, while seasonally and working-day adjusted volume grew by merely 1.3% on an annual basis. Compared with the previous quarter, GDP fell by 0.2%. In the first half of 2024, the volume of GDP was 1.3% higher than a year earlier.
Due to the earlier release of preliminary data, it is now more difficult than in previous years to surmise the reasons for the weaker-than-expected second-quarter growth rate. In any case, according to the CSO, on the production side, industrial value added decreased in the second quarter. The recovery in construction, despite its small weight, may have contributed to overall growth to a non-trivial degree, but agriculture’s growth contribution has likely turned negative again, due to drought and heat waves. On the expenditure side, it can be assumed that the moderate expansion in private consumption continued, along with the decline in investments. The overall annual growth rate in final domestic use may have strengthened compared to the first quarter. In addition, the earlier strong positive contribution of net export may have been reduced to a fraction of its earlier level amid the spectacular weakness of external demand.
The disappointing second-quarter growth figures have cast a new light on this year’s outlook: the annual rate of GDP growth will likely fall short of 2%.

04.06.2024. GDP: expanding consumption, falling investments and plummeting inventories in Q1

The second estimate confirms that the unadjusted GDP was up 1.1% in the first quarter of 2024. Compared to the previous quarter, the GDP grew by 0.8%, which surpassed the EU-average growth rate of 0.3%.
On the expenditure side, the growth was mainly supported by private consumption, with a growth rate of 3.4%. By contrast, fixed capital formation continued to fall, by nearly 7%, while inventories kept contracting at a striking pace, leading to a plunge in total capital formation by almost 22%. Overall final domestic use was down 2.9%. Import also fell by more than 9%, due to which the growth contribution of net exports remained strongly positive and surpassed the negative contribution of domestic demand to GDP growth.
On the production side, economic growth was mostly driven by services. Industrial output, on the other hand, is still on a decrease.

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Economic Trends 2024/2 out now

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1112 Budapest, Budaörsi út 45.

telefonszám: +36 1 309 2695,faxszám: +36 1 309 2647

e-mail: info@kopint-tarki.hu

telefonszám: +36 1 309 2695,
faxszám: +36 1 309 2647