Hungary is starting to step on a growth path, said Economy Minister Mihály Varga. He added that although output growth is likely to be moderate in the first half of the year, a more pronounced improvement of the economy is expected in the second half and annual GDP growth could even exceed 1% in 2013.
The minister told government portal kormany.hu that based on preliminary GDP data, recently published positive purchasing manager indices and improving consumer confidence, a further strengthening of economic performance may be expected.
Hungary’s GDP increased by 0.7% in the first quarter compared to the fourth quarter in 2012, decreasing by only 0.9% compared to the same period last year, against the market’s call for a 1.3% contraction. According to data adjusted for calendar effects GDP declined by 0.3%.
Varga noted that the stabilisation measures of the past year have been brought to fruition.
He also said Hungary’s growth indicators are turning out as the cabinet envisaged at the end of 2012, i.e. slower growth could be expected in the first half of the year, and that performance is likely to improve in the second half.
Varga underlined that if you compare the first quarter’s figures with the previous three-month period you can see that “Hungary is emerging from recession [and] it is beginning to set on a growth course.”
Whereas the Central Statistics Office (KSH) will publish detailed GDP data only at a later date is is already evident that agriculture, industrial production and the construction sector are the segments that have fundamentally aided economic growth, the minister said. He added the government hopes other factors will also be positive contributors this year.
In this respect he pointed to the joint lending boost programme of the cabinet and the central bank that is aimed at providing a significant assistance to the developments, investments and job creation of small and medium-sized enterprises.
Varga told public television M1 that the government had expected favourable Q1 growth figures. For now the latest GDP data do not alter the fiscal adjustment measures announced last week, he added.
“All I can say is that if the government wants to re-evaluate this decision it can obviously happen only in the summer,” Varga said.
Source and read more: www.portfolio.hu
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