Private consumption carries growth, but investments dropped in Hungary

Today, we are looking at the GDP structure in the second quarter and more broadly in the first half of the year. Undeniably, the consumption of households is the key driver of growth, as it has increased in all CEE countries due to solid real wage growth. Romania and Croatia saw private consumption growing at the fastest pace, not only in the second quarter of 2024 but also throughout the first half of the year. On the other hand, growth of final expenditure of households remained rather meager in Czechia, Slovakia, and Slovenia. Investment activity showed a more mixed picture. In the second quarter of 2024, investment grew everywhere except in Hungary and Slovenia. While in Slovenia, the drop in investment activity was rather peripheral (allowing marginally positive growth dynamics in 1H2024), in Hungary, the decline was quite substantial, reaching -13.3% y/y (2015 chained linked volumes). Such development only deepens the downward trend in investment growth in Hungary, making it a clear outlier. Hungary is the only country where investment is lower compared to the pre-pandemic level.