Investment volume falls 12.1 percent in Q3

Quarter on quarter, volume dropped a seasonally adjusted 2.2 percent.

KSH said most branches of the national economy had contributed to the decline, with investment volume rising only in the manufacturing sector, public administration and a few smaller segments.

In the manufacturing sector, investment volume grew by 6.3 percent year on year, while construction dropped by 21.6 percent.

In absolute terms, investments came to 3,781 billion forints in Q3. Manufacturing sector investment accounted for 1,202 billion of the total.

Commenting on the figures, the economic development ministry said the war in Ukraine and the EU’s sanctions had affected investment trends in the third quarter, adding that shrinking demand and high interest rates also accounted for the smaller volume.

The ministry noted that inflation contracted to below 10 percent in October, and real wages were growing. The sole factor hindering economic growth and investments was growing positive real interest rates “due to a high, above-inflation base rate”, the ministry said. “This is killing consumption and investments…” the ministry said.

The ministry welcomed, however, that in manufacturing, including in car and battery making, investments had increased, just as they had done in the first and second quarters of the year.