Merchandise trade balance improved in December

HUNGARY - In Brief 08 Feb 2023 by Istvan Racz
This was the first time since April 2021 that the trade balance got better than a year earlier: Note: Monthly merchandise trade balances in EUR million; Source: KSH In nominal EUR terms, exports rose by 12.3% yoy, whereas imports grew by 9.9% yoy in December. As a result, the monthly trade deficit fell to €154m, from €358m in December 2021. Breakdowns by volumes/prices and by products have not been made available yet. Our preliminary guess is that the improvement took place on decreasing gas imports bought at decreasing prices, and to a lesser extent on contained domestic demand for non-energy items. Recently it has been clarified that the unusually big deficit of November was caused mainly by an unusually high volume of gas imports, as a matter of hoarding for the winter season. The MNB has been predicting the early arrival of a turnaround by the trade balance in the positive direction, and the December figure may be the first sign of this genuinely happening. Improvement may have been helped by the unusually warm weather recorded so far this winter. (By the way, January was on average 4.5 degrees Celsius warmer than the average recorded between 1991-2020, according to fresh reports.)

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