Hungarian economy likely to have grown strongly in Q2 2018

The second quarter growth data of Hungarian economy is set to be released tomorrow. According to a KBC Market Research report, the Hungarian economy is expected to have recorded a strong growth in the second quarter as well. The economy had expanded 4.4 percent year-on-year in the first quarter of 2018 and based on the monthly available figures the economy is likely to have kept its growth speed in the second quarter.

Household consumption and investment are the main driver of growth. Household consumption is expected to have accelerated slightly, owing to the rising employment, the wage rise and the growing borrowing. The investment is booming owing to the government spending and pre-financing of EU projects. Moreover, the low interest environment underpins the investment.

Meanwhile, the net import position is likely to have worsened in the second quarter as the increased consumption and investment levels come with more import.

“On the supply side the industrial production more or less kept is volume increase of the first quarter, the construction might slightly slow down because of base effect, while market services might accelerate driven by domestic consumption”, added KBC Market Research.