For the third time in its history Hungary’s monthly trade balance showed surplus of over 1 billion euros in September. The high surplus was not the result of soaring exports rather than subdued imports.
The 1.9% year-on-year growth in exports (in euro terms) is not exactly robust, but in view of the fact that the Central Statistical Office (KSH) reported a m/m contraction in industrial production on Tuesday, we should not be complaining. It is a warning sign, though, that imports contracted by 0.2% yr/yr, which - coupled with a strong growth rate at household consumption - raises the question whether it was investment activity or re-export targeted stockpiling activity that became more subdued. Our seasonally adjusted show a flattened trend in foreign trade, but fortunately there is no sudden halt.
The trade balance of the first three quarters grew further and approached EUR 7.7 billion. By the end of the year the surplus could exceed even EUR 10 bn, which would be a new all-time high and it would be also surprising, considering the IP and domestic absorption data.
