HU: GDP figures came as huge negative surprise

Todays flash GDP figures for 3Q24 brought huge negative surprise. Compared to the previous quarter, the economy shrank by 0.7%. The yearly change of GDP came at -0.7%. In the first three quarters, the performance of the economy was 0.6% higher according to raw data and 0.7% higher according to seasonally and calendar adjusted and reconciled data than in the same period of the previous year.

The breakdown of the GDP figure will be released on only Dec 3. The Statistical Office says that The total performance of agriculture, industry and construction, making up about one-third of the economy, contributed to the decrease in the volume of gross domestic product compared to the same period of the previous year by approximately 2 percentage points. Both market and non-market service performances slowed the downturn. According to that the setback of agriculture could be not only in the double-digit negative territory but a more severe one, perhaps closer to the ones in 2022.

We expected a slight setback q/q, however the actual figure significantly exceeded the amount. After a shocking Q2 data, a more shocking came today for Q3. So far, we projected 1.4% FY growth for 2024 which now become unachievable. We will significantly revise our forecast downwards when the details are out. A figure between 0,5-1,0% could be reasonable for now closer to the lower bound.