In consequence of the government’s economic policy focusing on tax reductions and pay rises, economic growth in the 3rd quarter of 2018 was higher than preliminary estimates indicated, peaking at 5.2 per cent.

This is a growth rate two and a half times that of the European Union. Based on data existing since 1995, the economy’s expansion has never before reached this level. With the 4.9 per cent growth rate recorded in the first three quarters, Hungary is ranked second in the EU at present.

The better-than-anticipated output of the services sector and industry was the main contributor to the fact that economic growth was 0.2 per cent higher in the third quarter of the year compared with data previously estimated. This indicates that the performance of the economy will not decline during the remainder of the year, thereby reaching a growth rate well in excess of four per cent.

The data now released also confirms that a number of sectors in the national economy have contributed to this expansion. The housing programme introduced for families plays a prominent role in the increase of the added value of the construction industry and the expansion of home construction projects. As a result of the six-year tax cut and pay rise agreement, today not only more than 4.5 million people have jobs, but wages are also rising dynamically, by 11.7 per cent. This also has an impact on the spending of disposable incomes: families are able to spend more and more, and the purchase consumption of households has increased by 5.3 per cent compared with the previous year’s corresponding period. The significant 20 per cent rise in investments underlines the effective utilisation of funds available for the development of the economy. Additionally, there has been an increase in agricultural production as well.

After the 2013 turnaround, the Hungarian economy is now on a new course of growth. As a result, in recent years there has been a significant growth in Hungary on the whole by international standards. Data shows that Hungary’s GDP has exceeded the level recorded at the beginning of 2010 by 25 per cent, and has exceeded that of 2014 by more than 18 per cent. Also in the coming years, expansion may continue to remain at around four per cent.

(Ministry of Finance)