Actual (4Q): 0.3 % q/q, 1.4 % y/y
Consensus: 1.0 % y/y
Previous (3Q): 0.4 % q/q, 1.4 % y/y
The Hungarian economy has surprised positively as it kept its pace in the 4Q, while a slowdown was expected. According to the KSH, the growth was driven by industrial exports and agriculture; the industrial production accelerated in the 4Q compared with the previous quarter. No further details are available in the first release.
Although the GDP growth is good, the data does not show the strength of the domestic demand and, thus, it does not tell about risks for inflationary expectations. We consider the demand-driven inflation pressures still low; they should not be an argument for a tighter monetary policy. This year, the GDP is expected to decrease slightly. The first half should be the more difficult part of the year as the weak domestic demand will combine with the expected GDP contraction in the Eurozone.