Published on: 7 June 2016

GDP rises by 0.9%

The volume of gross domestic product was 0.9% higher in Hungary in the 1st quarter of 2016 than in the corresponding period of the previous year. The growth rate was raised by market services and reduced slightly by industry and significantly by construction. According to seasonally and calendar adjusted data the performance of the economy was up by 0.4% compared to the corresponding quarter of the previous year and down by 0.8% compared to the previous quarter.

In the 1st quarter of 2016 compared to the corresponding period of the previous year:

The volume of GDP increased by 0.9%. Compared with the 1st-quarter figure issued in the flash estimate, the second estimate was unchanged.

Production approach:

The value added of industry as well as of manufacturing within this was down by 0.7% year on year. Out of sub-sections with relatively significant weight, the manufacture of computer, electronic and optical products grew, while the performance of the production of transport equipment dropped. The decline of non-industrial activities within industry was also considerable. (Enterprises classified into industry may perform not only industrial but also other, e.g. commercial activities.)

The performance of construction fell by 28%, within which it was civil engineering that decreased the most.

The value added of agriculture became 3.5% lower.

The gross value added of services was up by 3.0% in total. The value added of wholesale and retail trade as well as accommodation and food service activities rose by 6.4%, within which it was accommodation and food service activities that grew largely. The performance of transportation and storage went up by 3.1%. Owing to the growth of computer programming, consultancy and related activities the value added of information and communication became 3.8% higher. The aggregate value added of professional, scientific, technical and administrative activities went up by 5.4%, within which it was the growth of administrative and support service activities that was significant. The aggregate performance of public administration, education and health rose by 0.7%. The performance of financial and insurance activities was lowered by 0.2%, within which financial intermediation services indirectly measured were reduced and the balance of commissions and fees slightly increased.

Services contributed by 1.6 percentage points to the 0.9% growth of gross domestic product in the 1st quarter of 2016. Within services it was the contribution of wholesale and retail trade as well as accommodation and food service activities (0.6 percentage point) that was the most significant. Construction lowered GDP growth rate by 0.7 percentage point, while industry and agriculture by 0.1 percentage point each.

Table 1: Volume indices of production of gross domestic product (GDP)

(corresponding period of previous year = 100.0%)

NACE Industries 2015 2016
Q1 Q2 Q3 Q4 Q1
AAgriculture, forestry, fishing97.984.183.888.396.5
B–EMining and quarrying, manufacturing and electricity107.6105.6104.9107.299.3
C Of which: manufacturing107.9106.5105.6108.399.3
FConstruction109.3106.399.7100.372.5
G–TServices, total, of which:102.1102.6103.5103.0103.0
G+I Wholesale and retail trade, accommodation and food service activities105.6105.4107.0105.0106.4
H Transportation and storage100.2102.2102.6101.5103.1
J Information and communication102.1102.8104.7102.0103.8
K Financial and insurance activities99.099.499.8101.099.8
L Real estate activities99.9101.1101.6101.6101.2
M–N Professional, scientific, technical and administrative activities105.7105.0105.2106.4105.4
O–Q Public administration, education, health and social work activities99.2100.8100.8101.5100.7
R–T Arts, entertainment and other services106.4101.8109.3106.7102.8
GDP, total (at purchaser's prices)103.5102.7102.4103.2100.9

Expenditure approach:

The actual final consumption of households was up by 4.0% compared to the same period of the previous year. Household final consumption expenditure, representing the largest proportion of the components of the actual final consumption of households, increased by 4.8%. Volume increases were measured in all the groups of expenditure within household final consumption expenditure. The volume of transport, recreation and culture, miscellaneous goods and services as well as restaurants and hotels rose at rates exceeding the average out of the groups of expenditure with large weight. The consumption expenditure of Hungarians abroad grew more strongly than the consumption expenditure of foreigners in Hungary. The (domestic) consumption expenditure of households on the territory of Hungary went up by 4.3%.

The volume of social transfers in kind from the government was lowered by 0.3% and that of the actual final consumption of the government grew by 3.4%.

As a result of the above trends, actual final consumption rose by 3.9%.

Gross fixed capital formation fell by 7.8%, which was crucially due to the completion of developments financed from EU sources, which in turn affected the investments of budgetary units to a higher extent. The volume of investments in machinery and equipment and that of construction investments both decreased, the latter to a higher extent. Out of industries having relatively large weight, the investment performance of manufacturing, transportation and storage, public administration and defence, water and waste management activities and agriculture was reduced, that of real estate activities stagnated, while the investment performance of energy industry, of wholesale and retail trade, and repair of motor vehicles and motorcycles and of information and communication increased.

Gross capital formation was cut by 3.5% compared to a year earlier.

Domestic use as a whole was up by 2.4% in the 1st quarter.

Table 2: Volume indices of final use of gross domestic product (GDP)

(corresponding period of previous year = 100.0%)

Items of use 2015 2016
Q1 Q2 Q3 Q4 Q1
Household final consumption expenditure103.4102.8102.7103.5104.8
Social transfers in kind from government99.199.2101.9101.999.7
Social transfers in kind from NPISHs98.9100.1101.2101.5105.2
Actual final consumption of households102.6102.1102.5103.2104.0
Actual final consumption of government94.496.0105.1106.7103.4
Actual final consumption, total101.4101.2102.9103.7103.9
Gross fixed capital formation94.5105.098.6106.592.2
Changes in inventoriesa)xxxxx
Gross capital formation, total104.3100.697.2101.696.5
Domestic use, total101.9101.1101.4103.2102.4
Exports, of which:108.7108.8108.6107.7105.7
Exports of goods108.4109.3108.3108.5105.2
Exports of services110.1106.9109.6104.5107.8
Imports, of which:107.4107.5108.1108.0107.8
Imports of goods106.9107.5108.1107.2108.0
Imports of services110.3107.4108.2111.8107.1
External trade balance of goods and servicesa)xxxxx
Gross domestic product (GDP), total103.5102.7102.4103.2100.9

a) For these items, volume indices are not applicable.

In the balance of external trade of the national economy a surplus of 875 billion forints was generated at current prices. Exports were up by 5.7% and imports by 7.8%. In trade in goods, exports grew by 5.2% and imports by 8.0%. Within the external trade of the national economy the exports of services (including tourism) were 7.8% and their imports 7.1% higher than a year earlier.

Actual final consumption contributed by 2.8 percentage points to the 0.9% growth of gross domestic product in the 1st quarter of 2016. Gross capital formation slowed down GDP growth by 0.7 percentage point and external trade in total by 1.2 percentage points.

In the 1st quarter of 2016 compared to the previous quarter:

According to seasonally and calendar adjusted data the performance of the economy decreased by 0.8%. (Comparison to the previous quarter is always based on seasonally and calendar adjusted data.)

According to the production approach, gross value added was up by 0.4% in agriculture and by 0.3% in services, but construction decreased by 24% and industry by 2.4%.

According to the expenditure approach, household final consumption expenditure went up by 1.3%, while social transfers in kind from the government were reduced by 0.2% and the actual final consumption of the government was down by 1.2% out of the components of actual final consumption. Gross fixed capital formation fell by 13%. In external trade, exports increased by 1.5% and imports by 2.5%.