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Hungary's GDP - It is a game of two-halves

The Slovak, Czech, Polish economy have been growing faster than the Hungarain for a decade but Hungary stopped falling behind from the EU average (began in 2007) last year.

15 February 2012

The Hungarian economy groth was 1.7 percent last year

The Hungarian economy growth was 1.7 percent last year

The Hungarian economy growth was 1.7 percent last year. This is sufficient only to stop falling behind, which has been essentially observed since 2007.

The Hungarian economy, in the early years of 2000, respectively increased above the EU average, although this was supported due to overspending state until 2006. The GDP growth was higher with 2% than the current EU-27 average, which simplistically means that the Hungarian economy was getting closer with 2% a year to the Europena Union average.

The necessary fiscal adjustment, however, revealed the weaknesses of the Hungarian economy. The world economic crisis (from fall of 2008) affected Hungary more sensitively due to restrictive fiscal policy as well as the EU as a whole.

While the EU recession was 4.3 in 2009 but the Hungarian economy suffered from 6.8% drop, and recover was slower one year later than the average of the EU economies. Last year, however, essentially similar performance could be noted in the statistics - although the trifle beyond the EU average of 1.7 percent growth in Hungary where came up with that huge, 2.5% of GDP impulse with respect to the economy through state budget, while tightening was and is on the agenda in Europe.

GDP growth in %

Hungary Slovakia Czech Republic Poland EU27 avarage
2003 3.9 4.8 3.8 3.9 1.4
2004 4.8 5.1 4.7 5.3 2.5
2005 4 6.7 6.8 3.6 2
2006 3.9 8.3 7 6.2 3.3
2007 0.1 10.5 5.7 6.8 3.2
2008 0.9 5.9 3.1 5.1 0.3
2009 -6.8 -4.9 -4.7 1.6 -4.3
2010 1.3 4.2 2.7 3.9 2
2011 1.7 2.9 1.7 4 (expected) 1.6

Source: Eurostat

Falling behind from the region , however, has not stopped. All three of Czech, Polish and Slovak members have shown higher economic growth than the Hungarian economy nearly for a decade and the gap has been particularly accelerated since 2006. For example, 0.1% of the total Hungarian GDP in 2007 when 10.5% of GDP growth in Slovakian racing, but Poland has also reached its best growth of the decade with 6.8%.

The Polish performance for 2011 have not yet been disclosed, but the European Commission predicts 4% expansion in Warsaw while the Czech economy growth was 1.7% and Slovakian economy growth was 2.9 percent in 2011.

Little beauty spot, if we only look at data of the fourth quarter of 2011 when Hungarian economy performance in the central field. Hungary reached 1.4% expansion which is nowhere near the Slovakian 3.4% growth, but much closer to Romanian 1.9% growth and looks much nicer from Czech 0.5% increase. The EU-27 average was 0.9% in 2011 according to Eurostat.