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Industrial output down 0.2 percent yr/yr in January

Hungarian industrial output fell by an annual 0.2 percent in January, the Central Statistical Office (KSH) said on Tuesday. Adjusted for the number of working days, output declined by 3.2 percent.

KSH said output of Hungary’s automotive industry, as well as its computer, electronics and optical equipment sectors grew, while output of the food, drinks and tobacco products segment fell.

Month on month, output fell by 5.1 percent, based on seasonally and working day-adjusted data.

Commenting on the data, the ministry of economic development blamed the war in Ukraine and “failed Brussels sanctions” for “significantly harming” the Hungarian economy.

The ministry said in a statement that sanctions against Russia had caused an energy crisis, putting the economy which heavily relies on energy in a tough spot, with knock-on effects including rising cost of raw materials and other types of inflation.

Amid the current high interest rate environment, businesses must contend with borrowing rates of 20 percent, and this, too, is weighing on the economy, it said.

But weaker industrial output, the statement added, would be “temporary”, noting that the government has adopted a package of 20 measures to combat inflation, prevent a recession, maintain full employment and protect families. Further, a 700 billion forint (EUR 1.6bn) loan scheme for industry and another 600 billion forint capital investment programme for businesses will help to bring inflation down into single digits by year-end and help the economy grow by 1.5 percent this year, the ministry said.

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