The volume of developments in the Hungarian economy rose 18.3% year on year in the third quarter of 2017, the Central Statistical Office (KSH) reported on Tuesday. Although the growth rate is below the H1 print, it remains high compared to the low base.
The sharp rise in investment is linked to the EU budget cycle: while projects co-financed by the EU practically dried up last year, they took off again this year. At the same time, private investments have also been picking up nicely over the last few quarters, in harmony with the upturn in the world economy.
The stats office said a growth of 18% was recorded for enterprises employing at least 50 persons, realising nearly six-tenths of the investment performance, and of 65% for budgetary units, realising more than one-tenth of the investment performance.
The developments of manufacturing, representing 30% of investments in the national economy and continuing a permanent expansion lasting for one and a half years, grew by 14%. The largest contributor to the increase was investments in the manufacture of transport equipment, realising three-tenths of investments in manufacturing.
Significant expansions were registered in the manufacture of electrical equipment as well as computer, electronic and optical products. Investment activity rose in all sections except for water and waste management, where the decrease was 9.6%.
The volume of investments of real estate activities, considered as the second largest investor, rose by 19%, with growths realised in dwelling constructions and renovations as well as in commercial real estate developments.
The volume of investments of transportation and storage, considered as the third largest investor based on developments, went up significantly, too (by 11%). Motorway, motor road and railway construction projects financed from EU funds grew, and enterprises engaged in transportation also increased their developments.
In mostly publicly financed areas - the total share of which approximated one-tenth of investments - investments expanded at a rate above the average, primarily due to developments financed from EU funds. The 51% increase in public administration and defence and compulsory social security was influenced by expenditures on the renovation of public buildings and public space as well as on law enforcement and disaster management. The volume of investments was 86% higher in education and 95% more in human health and social work activities than the low base one year earlier.
If you have a good memory, you may wonder if the figures published today were smaller or not than those in the report on the preceding quarter. And you would be right if you guessed they were smaller. It is because the stats office made quite a revision to the data. The yr/yr indices, however, do not show contraction because this year’s performance is worse than it was previously reported, but because the KSH revised the 2016 figures upwardly, hence the base got higher.
The zigzag of investments is clearly attested by the chart below which shows that the volume of developments reached the end-2015 peak.
