Ministry calls stagnation of industrial growth temporary

The Ministry for National Economy expects stagnating industrial output growth to be transitory in Hungary, as both order volume and industrial confidence indices are pointing to further expansion, Minister of State for Economic Development and Regulation István Lepsényi said, commenting on the latest industrial output data released by the Hungarian Central Statistical Office (KSH) last Friday.

According to a statement by the Ministry for National Economy, the Minister of State emphasized that although the volume of output fell year-on-year by 0.3 percent in June, the indicator, as a whole, rose by 2.3 percent in the first half of the year. The slight decrease in June is mainly attributable to a high base in the previous year, he added.

In the second quarter – following a minor drop at the beginning of the year – the volume of output picked up and grew by 4.5 percent year-on-year, and by 3.1 percent quarter-on-quarter. As another positive sign, the volume of industrial orders is also on the rise. István Lepsényi stressed that next week’s detailed data might shed more light on the performance of individual sectors.

Hungary’s confidence indices are also signaling further expansion, he said. The GKI-Erste economic sentiment index of July 2016 showed marked improvement compared to the reading of the previous month. Within this, the industrial confidence index hit the highest level in one-and-a-half years. Several indicators – state of business, incoming orders and stocks – have improved. Capacity utilization was another factor regarding which sentiment was better than in the previous quarter, he pointed out.