GDP rises by 2.2%
The volume of gross domestic product was 2.2% higher in Hungary in the 1st quarter of 2020 than in the corresponding period of the previous year. The extraordinary situation resulting from the corona virus pandemic had a negative impact on the performance of most sections, but market services and, to a lesser extent, industry continued to be the driving forces for growth in the 1st quarter as a whole. According to seasonally and calendar adjusted and reconciled data the performance of the economy was up by 2.0% compared to the corresponding quarter of the previous year and decreased by 0.4% compared to the previous quarter.
In the 1st quarter of 2020 compared to the corresponding period of the previous year:
The volume of GDP was up by 2.2%. Compared with the 1st-quarter figure issued in the flash estimate, the raw volume index in the second estimate was unchanged.1
Production approach:
The performance of industry went up by 1.7%, within which that of manufacturing by 1.3% compared to the same period of the previous year. Among manufacturing branches, the largest contributors to the growth of industry were the manufacture of electrical equipment and the manufacture of computer, electronic and optical products. The value added of construction increased by 3.0%. The performance of agriculture decreased by 0.6% compared to the corresponding period of the previous year.
Table 1: Volume indices of production of gross domestic product (GDP)
(corresponding period of previous year = 100.0%)
| NACE | Industry | 2019 | 2020 | |||
|---|---|---|---|---|---|---|
| quarter | ||||||
| I | II | III | IV | I | ||
| A | Agriculture, forestry and fishing | 102.2 | 99.4 | 98.0 | 101.0 | 99.4 |
| B–E | Manufacturing, mining and quarrying and other industry | 105.8 | 103.8 | 107.6 | 103.2 | 101.7 |
| C | Of which: manufacturing | 106.0 | 103.3 | 108.1 | 103.0 | 101.3 |
| F | Construction | 144.5 | 127.2 | 118.4 | 111.3 | 103.0 |
| G–T | Services, total, of which: | 103.8 | 104.3 | 104.0 | 104.6 | 102.4 |
| G+I | Wholesale and retail trade and accommodation and food service activities | 106.5 | 107.7 | 109.4 | 110.7 | 105.0 |
| H | Transportation and storage | 103.3 | 105.5 | 106.1 | 106.1 | 102.6 |
| J | Information and communication | 106.5 | 105.1 | 106.5 | 106.9 | 108.8 |
| K | Financial and insurance activities | 103.1 | 103.9 | 104.1 | 104.5 | 104.4 |
| L | Real estate activities | 104.6 | 104.6 | 103.9 | 104.3 | 102.5 |
| M–N | Professional, scientific, technical and administrative activities | 107.8 | 107.3 | 106.1 | 105.8 | 105.0 |
| O–Q | Public administration, education and health and social work activities | 99.2 | 99.6 | 97.6 | 98.0 | 97.2 |
| R–T | Arts, entertainment and other services | 102.8 | 102.1 | 101.9 | 103.1 | 100.0 |
| GDP, total (at purchasers’ prices) | 105.3 | 104.9 | 105.0 | 104.5 | 102.2 | |
The gross value added of services was up by 2.4% in total, the highest growth (8.8%) was reached by information and communication. The value added of wholesale and retail trade and accommodation and food service activities as well as professional, scientific, technical and administrative activities equally rose by 5.0%. The performance of financial and insurance activities went up by 4.4%. The total value added of public administration, education and health decreased by 2.8%.
Services contributed by 1.2 percentage points, industry by 0.4 percentage point and construction by 0.1 percentage point to the 2.2% rise of gross domestic product in the 1st quarter of 2020. The most significant contribution (0.5 percentage point) within services was observed for wholesale and retail trade and accommodation and food service activities. Within this industry, the share of wholesale and retail trade, and repair of motor vehicles and motorcycles was 85.1% based on figures for 2019. The significant share and dynamic growth of wholesale and retail trade, and repair of motor vehicles and motorcycles compensated the decline in accommodation and food service activities caused by the corona virus pandemic in the 1st quarter.
Expenditure approach:
The actual final consumption of households increased by 4.3% 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, rose by 5.0%. The (domestic) consumption expenditure of households realised on the territory of Hungary was 4.4% higher than a year earlier. Within this, a higher-than-average growth was recorded in the volume of domestic consumption expenditure on durable goods (e.g. passenger motor vehicles, furniture, large electric household appliances: 12%) and non-durable goods (e.g. food, alcoholic beverages, tobacco, electricity, gas and other fuels, water supply, medicines: 6.7%), compared with a lower-than-average rise for services (1.6%) as well as semi-durable goods (e.g. clothing, small household appliances, parts for vehicles: 0.2%).
The volume of social transfers in kind from the government grew by 1.1% and that of the actual final consumption of the government by 2.4%. The volume of social transfers in kind from non-profit institutions serving households (NPISHs) was up by 3.7%.
As a result of the above trends, actual final consumption became 4.0% higher.
The substantial increase in gross fixed capital formation since the 1st quarter of 2017 broke, gross fixed capital formation declined by 2.6% in the 1st quarter compared to the corresponding period of the previous year. The volume of investments in construction went up and that of investments in machinery and equipment decreased. The volume of investments lessened in the majority of industries. In the industries with the largest weight in total investments, the volume of investments rose in manufacturing and real estate activities, and it went down in transportation and storage.
Gross capital formation increased by 4.3% compared to one year earlier.
As a result of the trends of consumption and capital formation, domestic use as a whole became 4.0% higher 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 | 2019 | 2020 | |||
|---|---|---|---|---|---|
| quarter | |||||
| I | II | III | IV | I | |
| Household final consumption expenditure | 104.9 | 104.8 | 105.0 | 105.4 | 105.0 |
| Social transfers in kind from government | 101.9 | 103.0 | 98.7 | 102.3 | 101.1 |
| Social transfers in kind from NPISHs | 109.4 | 108.8 | 100.6 | 102.9 | 103.7 |
| Actual final consumption of households | 104.5 | 104.7 | 103.8 | 104.8 | 104.3 |
| Actual final consumption of government | 98.5 | 98.0 | 104.0 | 107.0 | 102.4 |
| Actual final consumption, total | 103.7 | 103.7 | 103.8 | 105.1 | 104.0 |
| Gross fixed capital formation | 124.9 | 117.8 | 116.1 | 107.0 | 97.4 |
| Changes in inventoriesa) | x | x | x | x | x |
| Acquisitions less disposals of valuablesa) | x | x | x | x | x |
| Gross capital formation, total | 111.6 | 112.3 | 105.9 | 109.7 | 104.3 |
| Domestic use, total | 105.2 | 105.8 | 104.8 | 106.6 | 104.0 |
| Exports, of which: | 107.3 | 103.7 | 110.2 | 103.3 | 99.5 |
| Exports of goods | 106.8 | 102.8 | 110.3 | 101.3 | 100.7 |
| Exports of services | 109.0 | 107.0 | 109.8 | 110.6 | 94.5 |
| Imports, of which: | 107.1 | 104.6 | 110.2 | 105.9 | 101.3 |
| Imports of goods | 107.4 | 104.6 | 110.4 | 105.1 | 102.5 |
| Imports of services | 105.7 | 104.6 | 109.2 | 110.2 | 95.2 |
| External balance of goods and servicesa) | x | x | x | x | x |
| Gross domestic product (GDP), total | 105.3 | 104.9 | 105.0 | 104.5 | 102.2 |
a) For these items the volume index is not applicable.
In the external trade of the national economy a surplus of 430 billion forints, smaller than a year earlier, was generated at current prices. The volume of imports was up by 1.3%, that of exports diminished by 0.5%. In trade in goods, exports grew by 0.7% and imports by 2.5%. Within the external trade of the national economy, the exports of services (including tourism) became 5.5% and their imports 4.8% lower compared to one year earlier.
Actual final consumption contributed by 2.8 percentage points and gross capital formation by 0.9 percentage point to the 2.2% growth of gross domestic product in the 1st quarter of 2020. The balance of external trade as a whole slowed down the growth of economic performance by 1.6 percentage points.
In the 1st quarter of 2020 compared to the previous quarter, based on seasonally and calendar adjusted and reconciled data:
The performance of the economy decreased by 0.4%.
From the production approach, gross value added became 0.3% higher in industry, 4.3% larger in construction and 0.6% lower in services.
From the expenditure approach, household final consumption expenditure increased by 1.2% and the volume of social transfers in kind from the government by 0.2%, while the actual final consumption of the government went down by 0.9% out of the components of actual final consumption. Gross fixed capital formation lessened by 0.9%. In external trade, exports decreased by 0.7% and imports by 1.0%.