Hungarian Q3 growth disappoints, while Germany beats expectations

In the third quarter of 2024, seasonally adjusted GDP increased by 0.4% q/q in the euro area and by 0.3% q/q in the EU according to a preliminary flash estimate. That corresponds to 0.9% y/y growth both in the Eurozone and EU. Importantly, German economy expanded by 0.2% q/q beating market expectations of marginal decline of quarter-on-quarter growth in the third quarter. As far as the region is concerned, Czechia and Hungary published their flash estimates of GDP growth. While in Czech economy performed in line with expectations, Hungary surprised visibly to the downside. The 3Q24 GDP arrived at -0.7% q/q and -0.8% y/y (headline number in non-adjusted terms) or -0.7% y/y if seasonally adjusted. The GDP structure will be known only at the beginning of December. So far, investment growth has underperformed visibly, and we suspect it may again be the reason for such sizable contraction. According to the Hungarian statistical office, performance of agriculture, industry and construction, making up about one-third of the economy, contributed to the decline. We will be revising our FY 2024 GDP forecast down towards 0.5%. Finally, Serbia will release its 3Q24 GDP figure on Thursday noon. We expect a solid performance of the economy with market consensus betting on 3.3% y/y growth.