No. 73, Katalin Nagy, Nóra Serfőző (2017): Differences of economic development and ways of cooperation in the Slovak-Hungarian cross border region

The article gives an overview of economic processes in the Slovak-Hungarian border region. The main conclusions are based on the principal findings of a Slovak-Hungarian cross border migration project funded by the Hungary-Slovakia Cross Border Cooperation Programme 2007-2013. According to the authors, economic and welfare differences between the two sides (Western and Eastern parts) of the Slovak-Hungarian border have remained substantial in the post-crisis period. This applies to both the Slovak and the Hungarian border regions. Whilst in the Eastern part, Slovak NUTS III regions are more advanced compared to Hungarian counties, in the Western half of the border, the picture is more differentiated. Losses due to the global crisis could be totally offset in the Western border region; this was only partially the true for the Eastern part of the border. The authors study the period from 2008 to 2013 and give a comprehensive analysis on regional differences based on macroeconomic and enterprise data and try to find an explanation for the persistent differences and for the slow progress of economic cooperation.

	2023 Fact	2024 Forecast	2025 Forecast
GDP	-0.9%	0.5%	2.4%
Gross Fixed Capital Formation	-7.4%	-12.0%	2.0%
Industrial Production	-5.5%	-3.5%	2.5%
Gross Salaries	14.2%	13.4%	8.0%
Unemployment Rate*	4.1%	4.6%	4.4%
Current+Capital Account**	1.2%	3.0%	2.3%
General Government**	-6.7%	-5.0%	-4.5 %
Consumer Price Index*	17.6%	3.7%	4.3%
MNB Base Rate***	10.75%	6.5%	6.0%
10-Year Yield***	5.86%	6.55%	6.0%

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

03.12.2024. GDP slides in Q3 amid plummeting investments, expanding consumption and a negative turn in net exports

The second estimate confirms that the unadjusted GDP was down 0.8% in the third quarter of 2024. Compared to the previous quarter, the GDP contracted by 0.7%.
On the expenditure side, the continued plunge in fixed capital formation was the main drag on growth. At the same time, some acceleration in growth was observed in household consumption and the change in inventories continued to add to growth. Final domestic use increased by 0.3% in Q3. But the growth contribution from net exports turned negative in the third quarter, due to the slowing decrease in import and the virtually unabated dip in export, and this was the decisive factor behind the overall decline in GDP.
On the production side, the services growth could not offset the negative effect of plummeting agricultural output, the deepening of industrial recession, and the shift from construction growth into decline.
In the first three quarters of 2024, GDP grew by a meager 0.6%.

30.10.2024. GDP: shocking growth numbers

According to the first estimate, unadjusted GDP was down 0.8% in the third quarter of 2024, while the seasonally and working-day adjusted volume decreased by 0.7% in annual terms. Compared with the previous quarter, GDP fell by 0.7%, the worst growth outcome in the EU according to the data known so far. In the first three quarters of 2024, the volume of GDP edged up by 0.6%.
On the production side, the combined growth contribution of agriculture, industry and construction was about -2% in the third quarter, according to the CSO, while the ability of the services sector to offset the drag by the primary and secondary sectors was much more limited than expected. A deceleration in services raises the possibility that on the expenditure side, it was not just the continuing fall in investments that weighed on growth but private consumption also failed to gain additional momentum in the third quarter – it could even weaken instead, despite the strong real wage growth, possibly due to the contradictory trends on the labor market.

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.