Q4 GDP came out even weaker than expected

HUNGARY - In Brief 14 Feb 2024 by Istvan Racz

---

This morning, KSH reported its first estimate for Q4 GDP growth at 0% qoq, 0.4% yoy, implying a 0.8% decrease of GDP in full-year 2023, following 4.6% growth in 2022, all in real terms, on seasonally and day-adjusted basis. As usual, details have not been released at this stage; KSH made only a very brief statement that agriculture, health care, social support services, information and communication activities all grew, whereas industry, construction and a part of commercial services, especially trade, contracted. Real GDP growth Note: In percent; Source: KSH The fact that quarterly growth did not accelerate further from Q3's revised 0.8% is not at all surprising, not least in view of the weakness of the industrial sector towards year-end, but analysts still expected some growth in Q4 as well - exactly 0.4% qoq as regards the median expectation, as we reported yesterday. So, no growth at all is a negative surprise, even if though year-on-year growth returned safely to the positive territory at last. For now, we see no reason for any serious disappointment, especially until we learn what contribution agriculture and health care, 2023's main 'growth-makers' made, and how 'core growth', i.e. the expansion on GDP excluding these two sectors, looked like in Q4. But anyway, today's GDP news will be widely taken as forint-negative, of course, and the more it will be so, the less the MNB will be able to go faster with further monetary loosening. Lately, there have been a number of similar forint-negative news items, including first Mr. Orbán's inability to grab any more EU funds in exchange for his yes vote on Ukraine, then the government decision to raise the fiscal deficit t...