According to the Central Statistics Office, Hungary’s gross domestic product grew by 11.3 percent in the third quarter of 2020 compared to the previous quarter. However, compared to the same period last year, there was a decline of 4.6 percent (4.7 percent if seasonally and calendar-adjusted). The decrease was lower than expected, not reaching 5 percent, and was moderated by growth in information, communication and financial services.
The impact of the coronavirus epidemic has not yet been fully overcome, but the recovery from the epidemic-induced crisis has begun.
CSO also published the annualized index, which shows how much the annual change would be if the current quarterly change versus the previous quarter continued for four quarters. It indicates a 53.5 percent increase in the third quarter, after a 46.8 percent decline in the previous quarter.
Although the CSO does not provide detailed data at the time of the first estimate, given the Q3 decline year-over-year, it can be assumed that the most significant weakness came from some service sectors; thus, individual sectors performed very differently, Gábor Regő, Head of the Macroeconomic Business Unit of Századvég, commented.
In the fourth quarter, however, growth could be hit again due to the new restrictions imposed, with GDP possibly dropping by close to 6 percent.
We expect mass vaccinations starting next April, so the restrictions should be significantly eased in the second quarter of 2021. As the recovery continues in the second half of the year, we expect very strong growth, Gergely Suppan, senior analyst at TakarékBank, said.
According to a statement from the Ministry of Finance, the economic performance of the third quarter shows that the Hungarian economy can recover quickly even after a near-complete closure in the spring. And it may quickly return to its previous growth trajectory even after the second closing in November. Still, for this year, experts predict GDP could fall another 6.4 percent, with growth of as much as 3.5 percent for 2021.