Largely mediocre numbers this week, from the growth point of view at least

HUNGARY - In Brief 07 Jun 2024 by Istvan Racz

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This morning, the front page of KSH's website started with the pretty good-looking report that the volume of gross industrial output grew by 6.4% yoy in April. Yes, for sure, but there were three more workdays (21) in April 2024 than in April 2023 (18). Consequently, the seasonally and day-adjusted growth was -0.7% mom, -2% yoy. And the fixed-base chart (Dec 2010 =100) shows the continuation of the same downtrend as the one that has been there for the last one-and-a-half years now:  This explains a lot about the April merchandise trade data as well, which showed a 13.6% yoy pick-up by exports, against a 0.8% yoy increase in imports, both in nominal forint terms, and a €1.8bn trade surplus for that single month, which is really impressive and is certainly a historic record. There are two minor clouds on the sky of happiness over this result: (a) the calendar problem mentioned above most certainly had an important influence on the sharp upturn seen in exports, and (b) in January-April together, merchandise exports still fell by 2.9% yoy, whereas imports dropped by a much bigger 11.5% yoy. (It would be much nicer to bring up volume indices, but those for April will be available only in largely three weeks from now.) So, the indeed impressive trade surplus was still based on the weakness of the domestic economy. Weak growth = strong BOP, that is the golden rule for a small, (very) open economy. As a third topic, retail sales fell by 0.9% mom, but they grew by 3.1% yoy in April, the latter following 3.6% yoy growth in March. Actually, this should not be seen as a particularly poor number. Anyway, this report means that the yoy growth of retail sales was positive in all of t...