Investment growth at 2.5 percent in Q1

Investments in machinery climbed by 7.0 percent, but construction investments edged down by 1.0 percent.

In absolute terms, Q1 investments reached 1,979 billion forints (EUR 5.6bn). Construction investments accounted for about 53 percent of the total.

Private sector investments dropped by 6.3 percent to 1,055 billion forints, while public sector investments climbed by 30.6 percent to 260 billion.

Manufacturing sector investments fell by 10.1 percent, construction sector investments jumped by 48.2 percent and investments in the commercial accommodations and catering sector increased by 12.8 percent.

Investment volume started rising again in Q4, after three consecutive quarters of declines.

The decline in trade in services slowed somewhat in the first quarter but remained in the double digits, KSH said. Exports of services fell by an annual 24.6 percent to 4.277 billion euros, while imports dropped by 16.3 percent to 3.451 billion.

The surplus in trade of services came to 826 million euros.

KSH noted that the coronavirus pandemic continued to significantly reduce foreign trade in services.

Contract work contributed around 319 million euros to Hungary’s surplus, while 317 million euros came in from tourism and 282 million from transport services.

Germany continues to be the most important foreign partner of Hungary with exchanges between the two accounting for 20 percent of total trade. The United States was in second place with 9.4 percent of total trade and Austria was third with 7.8 percent of the total.

Business services accounted for 53 percent of service exports and 69 percent of service imports. The share of transport services was 25 percent and 23 percent, respectively, KSH said.

Commenting on the data, Finance Minister Mihaly Varga said Hungary’s 27 percent investment rate in the first quarter had been one of the highest in the European Union. The growth came mainly on the back of government spending and household investment, he said in a video posted on Facebook.

Investments increased by 45 percent in the health-care sector, 33 percent in public administration, 31 percent in education, while investments in real estate were up 12 percent, he said.

Varga said the data vindicated the government’s investment support scheme designed to offset the effects of the coronavirus crisis.

Investments in Hungary are up 63 percent since 2010, three times the EU average investment growth rate, he said.

The government expects its economic protection measures to continue generating investment growth, Varga said