Government expenditures likely to contribute significantly to Hungarian economic growth in H1 2018
Source: FxWire Pro - Commentary / 19 Mar 2018 16:58:24 Eastern Standard Time
The Hungarian economy growth came in exceptionally solid in the fourth quarter of last year. It had expanded 4.4 percent year-on-year. The government expenditures contributed significantly to the headline growth in the fourth quarter, which might be repeated in the first half of 2018; however, the effect of budgetary spending would most likely wane after the April parliamentary elections.
Underlying economic activity is likely to stay robust as household consumption and gross fixed capital formation would strengthen further, noted Erste Group Research in a report. The already available high-frequency data from January, such as industrial production, construction, external trade and retail sales, support this assumption.
“However, in the absence of an additional fiscal impulse, we are unlikely to see similarly strong growth figures for a sustained period of time”, added Erste Group Research.
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