HU: Investments have not bottomed out
The Statistical Office published the second, detailed estimate of Q3 GDP. The figures are the same as they were by the flash: 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.
Regarding the details, on the final use side consumption proved to be a solid factor which moderated the setback significantly: household final consumption expenditure rose by 4.5%. Besides the performance of investments worsened by 3.2% compared to the Q2 sca. and therefore y/y figure came out at -14.0%. The two main elements of domestic demand totally offset one anothers contribution. Due to the lack of external demand net export contributed to the decline by -0.9%p.
Respect to the production side we can also observe a two-faced picture: generally producing branches (agriculture, industry and construction) contributed massively to the decline with volume changes of -14.9%, -4.4% and -4.0% respectively, while services could partially offset that negative effect. The best performers of services were entertainment, recreation services and education on yearly level.
According to high frequency data which are already available for Q4 and soft indicators the long-waited rebound of the economic activity has not started yet. The sentiment of both consumers and the corporates have worsened in November compared to October. Surprisingly the PMI for November returned above the 50-point-threshold which could be a good sign, however the general stance of the foreign environment, especially the German automotive industry leaves no reason for optimism in the short-term. We still see FY figure for 2024 at 0.5%. Regarding next year despite backed by lower real wage growth, consumption could be a solid rock of conjuncture. Besides that only huge question marks stand: investment activities and the capacity utilization of the massive manufacturing projects (BMW, BYD, CATL, Mercedes) are still extremely uncertain. All-in-all our forecast for next year is 2.0%.