Here is the GDP data for Hungary! Better than expected numbers arrived

The OSC’s preliminary estimate does not yet contain detailed information on the structure of economic performance. In a short statement, the agency writes that Compared to the previous quarter, the performance of most branches of the national economy expanded, which is completely understandable under the circumstances. The fall in economic performance compared to the same period of the previous year was moderated mainly by the growth of information, communications and financial services, according to which the correction in the services sector was significant.

Analysts have previewed that the industry found itself very soon after the restrictions were lifted, so it has likely fully offset the build-up caused by the spring close for the third quarter. Domestic tourism recovered rapidly during the summer and traffic in August was just behind last year, all of which unfortunately more than offset the intense and deep flight of foreign tourism that persisted throughout the summer. Thus, this area continued to experience a strong slowdown in the third quarter.

A similar picture emerges from the monthly production volume data. The industry could expand by up to a third on a quarterly basis, which in itself represents a significant contribution to growth, as the sector accounts for one fifth to one fourth of the Hungarian economy. However, on an annualized basis, there was no volume growth in the third quarter, so presumably the industry still contributed a little to keeping the annual GDP index negative.

The construction pattern, which remained in April, was only slightly different, but showed only a moderate recovery in the third quarter after the drop, so the sector performed on average roughly the same as in the previous quarter.

Unfortunately, the outlook for the fourth quarter has deteriorated sharply as the government has been forced to impose further restrictions on coronavirusto stop the second wave of the epidemic. (Of course, if it had not been introduced, the outbreak of the epidemic would have set the economy back, a little later, but perhaps even more severely.) October’s performance suggested a slowdown in the correction, regardless of the closes. area received a similar impact to the spring. The most important question is the impact of uncertainty on investment, consumption and employment decisions. Because of this, the fourth quarter could even cause another drop in GDP levels, although we do not expect such a big impact as in the spring.

In the first three quarters of the year, the average fall in GDP was 5.6% year-on-year. Based on the outlook, the overall GDP contraction in 2020 could be greater than this, roughly the question may be whether it will exceed the fall of 2009 seen in the financial crisis.

On the wide range of GDP growth: this is how we look
The OSC publishes several GDP indicators in its report. There are also three indices (year-on-year) compared to the same quarter of the previous year: a raw, aadjusted calendar effect(wda) and aseasonally and calendar adjusted (swda). Of these, the Portfolio has consistently considered the seasonal and calendar-adjusted index (swda) as the leading number since 2016. This is because the number of business days (especially if there is a jump in the topic or base period) has a significant effect on performance, which is definitely worth fixing. Furthermore, seasonal adjustment makes sense for annual indicators when the nature of seasonality changes within a year. As Eurostat refers to the swda number of each country, it facilitates international comparisons if we also consider that these are the main data.

thequarter-on-quarter GDP indexOf course, it is adjusted seasonally and by business days in all cases, since each quarter has very different weights and structures within GDP, otherwise it makes no sense to calculate growth. In most places in Europe, this is the main number, and the Portfolio also tries to prioritize this number due to its favorable characteristics. At the same time, this indicator has an unpleasant feature called endpoint weakness, that is, due to the nature of seasonal adjustment, the numbers change several times afterwards, but it is still very useful as a short-term economic indicator.

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