OREANDA-NEWS Hungary’s economic growth rate of 4.1 percent is the highest year-on-year figure in three years. The rate of growth beats prior estimates by international institutions and market analysts by a wide margin, while it is in line with the Ministry’s predictions. Favourable data are the result of the six-year wage agreement concluded in November 2016, tax reductions and rising output in the industrial and construction sectors.

Faster growth had been driven three major factors. First, industrial sector output – thanks to positive external and internal trends – gained 7.8 percent in the observed period. Second, the construction sector has seen output increase of some 25 percent, fuelled by infrastructure development and corporate projects as well as a housing boom which has been underpinned by the Family Housing Allowance (CSOK) programme. Third, the six-year wage agreement had led to dynamic wage growth, which in turn lifted demand and output at the services sector.

In the analysis of growth trends it has to be noted that expansion has been sustainable and it has not generated a higher level of indebtedness. The state budget deficit continues to be on target and the external trade balance continues to show massive surpluses.

The performance of the Hungarian economy has been remarkable even from an international perspective: in the estimate of the latest Eurostat flash report, the EU’s economy grew by 1.9 percent year-on-year, while Hungary’s growth rate was double this figure.

Since Hungary had chosen to go its own way and regained economic independence, the country’s economy has grown substantially stronger. That is why sovereignty in economic-, taxation and employment policies must be maintained. The Ministry for National Economy expects strong growth momentum to persist in coming quarters, and the county is on track to achieve the 4.1 percent growth target projected for the year 2017.