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Q2 GDP growth surprises analysts

Hungary's GDP grew by an annual 6.5 percent in the second quarter, slowing from 8.2 percent in Q1, the Central Statistical Office (KSH) said in a first reading of data released on Wednesday.

KSH said all branches of the national economy contributed to headline growth, with the exception of the farm sector. Growth was supported especially by industry, particularly food and drink production and electrical equipment manufacturing, and by market services, notably commercial accommodations and catering, and logistics services, it added.

Adjusted for seasonal and calendar year effects, Q2 GDP growth was level with the unadjusted figure.

In a quarter-on-quarter comparison, adjusted GDP rose by 1.1 percent.

First-half GDP growth climbed 7.3 percent year-on-year.

Gergely Suppan, chief analyst at Magyar Bankholding, said Q2 GDP growth beat expectations and was among the highest in the European Union. Magyar Bankholding could bump up its forecast for 5.7 percent full-year growth, he added, while acknowledging an expected slowdown in the coming quarters because of base effects and the impact of the war in Ukraine.

Janos Nagy, Erste Bank’s macro analyst, said monthly industrial output data already showed the resilience of Hungarian manufacturers as supply chain tensions continued, while higher wages and fiscal transfers boosted domestic consumption, supporting the performance of services. Erste puts full-year GDP growth at 5.5 percent, he added.

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