Minister of National Economy Mihaly Varga said the first-quarter figure was "exceptionally good", and mainly industry, the construction sector and market services had contributed. Industry added 1.5pc and the construction sector 0.5pc, he said, citing KSH figures.

Varga said he saw more potential in construction, which is helped by domestic and EU money and by CSOK, a home subsidy system extended at the beginning of 2016.

The government expected the economy to expand by above 4 percent this year, and given the performance so far, there was no reason to doubt this, he said. No analyst or bank had projected such a strong rate of growth.

"Hopefully, credit-rating agencies and international organisations will also review their data on the Hungarian economy in light of the current favourable results," Varga said.

Asked whether quick growth offered room for additional manoeuvring, the minister said the government plans no further tax cuts, as it had already taken the steps it could. The tax cuts planned for 2018 were contained in the respective bill before parliament.

Industry and construction sectors saw fast expansions, partly due to a low base, KSH statistician Zsuzsanna Boros Szoke said. Growth in the construction sector rose 24.7 percent in Q1 this year, after contracting 27.6 percent a year earlier, she said. This year's growth likely reflected EU funding.

Boros Szoke said that within industry, growth rates were high in the manufacturing sector, more specifically in vehicle manufacturing, computer, electronic and optical products manufacturing as well as in the pharmaceuticals sector. Growth in agriculture was mute, however.

Analysts told state news agency MTI that better-than-forecast Q1 data may prompt them to revise their 2017 and 2018 growth forecasts upwards. K&H Bank analyst David Nemeth said this year's GDP growth could reach 3.7 percent.

Gergely Suppan of Takarekbank said Q2 growth could be slower as a result of a stronger base and fewer working days, but the pace could accelerate again to exceed 4 percent as a result of the weak third and fourth quarters last year as well as investment and consumption pick-up.

Leading ING Bank analyst Peter Virovacz noted that the scale of the rise after last year-end's weakness was unexpected and could reflect stronger performance in the industrial sector and its effect on exports.

Erste Bank leading analyst Gergely Urmossy said the pace reflected both stronger performance and a low base.

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