The central bank was also surprised that the Hungarian economy pulled the brakes this way

After the market players, the Magyar Nemzeti Bank also evaluated the disappointing third quarter processes of the Hungarian economy. As is well known, the economy closed with a loss of 0.7 percent both quarterly and annually. The data was significantly lower than the central bank’s September forecast (this was an increase of 0.7 percent), but also from the market consensus (0.5 percent plus).

According to the KSH announcement, the volume of the gross domestic product for the same period of the previous year
to the relative decrease of agriculture, industry and construction collective performance
contributed approximately 2 percentage points. At the same time, the decline of the economy was restrained by the expansion of the added value of market and state services.

The main findings of the central bank:

• the increase in retail sales continued in the third quarter;
• consumption growth is helped by the rise in real wages, which averaged 9.8 percent in January-August 2024 compared to the same period of the previous year;
• the decline in industrial production may have continued in the third quarter.

The performance of domestic industry was mainly hampered by the general slowdown of German industry, primarily the production of electrical equipment, which includes battery production, and the emission of vehicle production, both of which fell, the MNB’s analysis agreed with Minister Márton Nagy.

Hungary lags behind

The economy of the European Union and the eurozone both grew by 0.9 percent compared to the same period of the previous year. Economic growth was the highest in Spain (+3.4 percent), while GDP decreased the most in Latvia (-1.4 percent) based on the data of the available 13 countries.

The economy of our main trading partner, Germany, shrank by 0.2 percent compared to the same period of the previous year.

The economy expanded by 0.3 percent in the European Union and by 0.4 percent in the eurozone on a quarterly basis in the third quarter of 2024. Based on the available data, the majority of economies grew slightly on a quarter/quarter basis.