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Investment growth returns in Q4

Investment volume in Hungary rose by an annual 2.5 percent in the fourth quarter of last year, after three consecutive quarters of declines, supported by public sector and household investments, the Central Statistical Office (KSH) said on Monday.

For the full year, investment volume fell by 3.8 percent, impacted by the pandemic.

In a quarter-on-quarter comparison, investment volume was up by a seasonally adjusted 4.8 percent.

In absolute terms, Q4 investments reached 4,093 billion forints, while investments for the full year came to 10,692 billion forints.

Finance Minister Mihaly Varga said that the real estate, public administration, education and health sectors had excelled with investment growth rates of at least 20 percent.

Varga said the government’s investment-promoting measures, the ongoing expansion of capacities, tax cuts and a top-notch investment rate within the European Union would further boost investment this year.

Analysts said the better-than-expected Q4 investment figures had contributed to a surprisingly high GDP figure, adding that the EU funds available this year may bring about another 6 to 10 percent rise in investments.

Gabor Regos of Szazadveg said the higher investment rate may promote Hungary’s economic recovery if private businesses become more active and major investment projects become less dependent on state subsidies.

Gergely Suppan of Takarekbank said that last year’s investment had exceeded the 2010 figure by 80.9 percent and the 2015 figure by 46.6 percent.

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