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… according to Eurostat forecasts, in 2020 the Hungarian gross domestic product fell by 5.2%
– said Viktor Orbán in his parliamentary speech today. The Prime Minister has published a number that is not yet public (according to the statistics publication rules, this is unfortunate, but not unprecedented in Hungary), and based on this, some calculations are possible.
The reference to an average annual contraction of GDP of 5.2% is probably not a Eurostat forecast (not produced by the Statistical Office of the European Union). The figure is presumably a preliminary estimate sent by the producers of national GDP statistics (from Hungary to the Central Statistical Office) to Brussels to be used there for the full initial EU GDP growth report. (Eurostat does not publish the Hungarian data alone).
According to a survey by portfolio analysts, experts predict an average annual decline of 5.5% for 2020, so Hungary’s economic performance may have been better than expected. Furthermore, as the figures for the first three quarters are already known, the discrepancy is largely due to the figures for the fourth quarter to be released tomorrow. Coincidentally, it is also expected to be -5.5%, but a much smaller decrease is needed for the annual average to improve to -5.2%. According to our calculations, the CSO can report an annual decline in GDP of 4.1 to 4.4 percent.and without the uncertainties (detailed below), the GDP figure would likely be 4.2% to 4.3%. That would be more than one percentage point better than expected.
If fourth quarter GDP were really that good, it would also mean that the economy’s performance had improved compared to the previous quarter. That would be a great word, as the fourth quarter (since mid-November) was already loaded with closures, so the performance of part of the service sector was destroyed again. However, the thing is not entirely unthinkable. In general, there is an opinion that the second wave of the epidemic has affected the economy to a lesser extent, and data from industry and construction support this. Of course, a positive quarterly GDP index would still be a big word, so tomorrow’s data could get even more intense attention.
The above calculation is surrounded by a series of uncertainties that make us completely unsure that the GDP figure is much better than expected.
- In addition to the latest data published in the fourth quarter, the already known figures for the previous quarters may have changed, so it is not certain that the last three months are solely responsible for the surprise that can be guessed in the annual average.
- The Eurostat number (KSH) may not have been final either, it may have been modified by late-breaking subdata.
- Unadjusted, business day adjusted, and seasonally adjusted indices are also reported in GDP statistics. There may be differences of 1 to 2 tenths of a percentage point between these, which also increases the inaccuracy of our estimate.
- Finally, the fact that the average annual figure of GDP is only known to one decimal place is also uncertain.
At the same time, coupled with the uncertainties above, we can say that following today’s announcement by Viktor Orbán, it would be a huge surprise if tomorrow’s GDP data were not better than the latest expert expectations.
Cover image: MTI / Koszticsák Szilárd
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