Q2 GDP data shows continued robust growth, with some confusion caused among analysts

HUNGARY - In Brief 16 Aug 2017 by Istvan Racz

---

Real GDP growth for Q2 was reported at 3.6% yoy on sda basis, just slightly down from 3.8% in Q1, this morning. This was above the otherwise nicely accelerating 2.2% yoy growth recorded in the Euro Area, but lower than the yoy growth figures reported for most of those other EU members in the CEE region (Romania 5.7%, Latvia 4.8%, Czech Republic 4.5%, Poland 4.4%, Lithuania 3.9%), on which data is currently available. At this moment, details for the composition of Hungarian GDP are not available. In some brief comments though, the KSH said that Q2 GDP was primarily driven by services, and it was pulled back by industry and agriculture.None of this represents any surprise, yet there seemed to be some unjustified confusion among analysts in the hours immediately after the release. Still yesterday, Portfolio.hu's analyst consensus was that the Q2 yoy growth figure may be 0.2 pps lower than the one reported for Q1, which happens to be the actual outcome now. But one little problem is that the consensus forecast was given for the unadjusted growth figure, which was 4.2% in Q1, and so the analyst consensus came out to 4% regarding Q2. As the unadjusted growth figure was reported at only 3.2% yoy for Q2, marking a material slowdown from Q1, some analysts went to explanations this morning on why the Q2 growth number was 'worse than expected'.But this does not make much sense. Yoy GDP growth was equally 3.7% in H1 2017 by the unadjusted and the sda figures, and prior to the release, the indication from available information was only that for Q2, the number may be the same or slightly below the Q1 data. For comparison between quarters, we think that analysts should use seasonally...