GDP decreases by 13.6%
The volume of gross domestic product declined by 13.6% in Hungary in the 2nd quarter of 2020 compared to the corresponding period of the previous year. The extraordinary situation resulting from the corona virus pandemic had a disadvantageous impact on the performance of most sections of the economy. According to seasonally and calendar adjusted and reconciled data the performance of the economy went down by 13.5% compared to the corresponding quarter of the previous year and by 14.5% compared to the previous quarter. In the first half of the year, the economic performance lessened by 6.1% according to raw data.
In the 2nd quarter of 2020 compared to the corresponding period of the previous year:
The volume of GDP fell by 13.6%. Compared with the 2nd-quarter figure issued in the flash estimate, the raw volume index in the second estimate was unchanged1.
Production approach:
The performance of industry shrank by 20.1%, within which that of manufacturing by 21.7% compared to the same period of the previous year. Among manufacturing branches, the increase in the manufacture of basic pharmaceutical products and pharmaceutical preparations moderated the decline, and the largest contributor to the decrease in the value added of industry was the manufacture of motor vehicles, trailers and semi-trailers. The value added of construction fell by 13.2%. The performance of agriculture lessened by 2.1% compared to the corresponding period of the previous year.
Table 1: Volume indices of production of gross domestic product (GDP)
(corresponding period of previous year = 100.0%)
| NACE | Industry | 2019 | 2020 | |||
|---|---|---|---|---|---|---|
| quarter | ||||||
| II | III | IV | I | II | ||
| A | Agriculture, forestry and fishing | 99.4 | 98.0 | 101.0 | 99.4 | 97.9 |
| B–E | Manufacturing, mining and quarrying and other industry | 103.8 | 107.6 | 103.2 | 101.7 | 79.9 |
| C | Of which: manufacturing | 103.3 | 108.1 | 103.0 | 101.3 | 78.3 |
| F | Construction | 127.2 | 118.4 | 111.3 | 103.0 | 86.8 |
| G–T | Services, total, of which: | 104.3 | 104.0 | 104.6 | 102.4 | 87.8 |
| G+I | Wholesale and retail trade and accommodation and food service activities | 107.7 | 109.4 | 110.7 | 105.0 | 87.4 |
| H | Transportation and storage | 105.5 | 106.1 | 106.1 | 102.6 | 75.4 |
| J | Information and communication | 105.1 | 106.5 | 106.9 | 108.8 | 98.2 |
| K | Financial and insurance activities | 103.9 | 104.1 | 104.5 | 104.4 | 103.4 |
| L | Real estate activities | 104.6 | 103.9 | 104.3 | 102.5 | 93.2 |
| M–N | Professional, scientific, technical and administrative activities | 107.3 | 106.1 | 105.8 | 105.0 | 85.9 |
| O–Q | Public administration, education and health and social work activities | 99.6 | 97.6 | 98.0 | 97.2 | 87.0 |
| R–T | Arts, entertainment and other services | 102.1 | 101.9 | 103.1 | 100.0 | 72.9 |
| GDP, total (at purchasers’ prices) | 104.9 | 105.0 | 104.5 | 102.2 | 86.4 | |
The gross value added of services decreased by 12.2% in total. The highest falls (of 27.1% and 24.6%) were in arts, entertainment and other services and transportation and storage, respectively. The value added of wholesale and retail trade and accommodation and food service activities and professional, scientific, technical and administrative activities went down by 12.6% and 14.1%, respectively. The performance of financial and insurance activities increased by 3.4%. The total value added of public administration, education and health declined by 13.0%.
Services contributed by 6.8 percentage points, industry by 4.3 percentage points and construction by 0.7 percentage point to the 13.6% decrease of gross domestic product in the 2nd quarter of 2020. The most significant contribution (of 1.9 percentage points) to the fall within services was observed for public administration, education and health.2
Expenditure approach:
The actual final consumption of households lessened by 8.6% compared to the same period of the previous year. Household final consumption expenditure, representing the largest proportion of the components of the actual final consumption of households, decreased by 8.4%. The (domestic) consumption expenditure of households realised on the territory of Hungary became more substantially, 12.8% lower than a year earlier, because the consumption expenditure of non-residents (e.g. tourists) declined significantly in the 2nd quarter. Within this, lower-than-average decreases (of 8.2%, 11.3% and 2.1%) were recorded in the volume of domestic consumption expenditure on durable, semi-durable and non-durable goods, respectively, compared with a higher fall (of 24.8%) for services.
The volume of social transfers in kind from the government went down by 11.1%, while that of the actual final consumption of the government increased by 5.8%. The volume of social transfers in kind from non-profit institutions serving households (NPISHs) lessened by 0.2%.
As a result of the above trends, actual final consumption became 6.6% lower.
Gross fixed capital formation became 13.5% lower in the 2nd quarter compared to the corresponding period of the previous year. Both the volume of investments in construction and that of investments in machinery and equipment significantly decreased. The volume of investments became lower in the majority of industries and thus in the industries with the largest weight in total investments, too.
Gross capital formation decreased by 5.0% compared to one year earlier.
As a result of the trends of consumption and capital formation, domestic use as a whole became 6.1% lower in the 2nd quarter.
Table 2: Volume indices of final use of gross domestic product (GDP)
(corresponding period of previous year = 100.0%)
| Items of use | 2019 | 2020 | |||
|---|---|---|---|---|---|
| quarter | |||||
| II | III | IV | I | II | |
| Household final consumption expenditure | 104.8 | 105.0 | 105.4 | 105.0 | 91.6 |
| Social transfers in kind from government | 103.0 | 98.7 | 102.3 | 101.1 | 88.9 |
| Social transfers in kind from NPISHs | 108.8 | 100.6 | 102.9 | 103.7 | 99.8 |
| Actual final consumption of households | 104.7 | 103.8 | 104.8 | 104.3 | 91.4 |
| Actual final consumption of government | 98.0 | 104.0 | 107.0 | 102.4 | 105.8 |
| Actual final consumption, total | 103.7 | 103.8 | 105.1 | 104.0 | 93.4 |
| Gross fixed capital formation | 117.8 | 116.1 | 107.0 | 97.4 | 86.5 |
| Changes in inventoriesa) | x | x | x | x | x |
| Acquisitions less disposals of valuablesa) | x | x | x | x | x |
| Gross capital formation, total | 112.3 | 105.9 | 109.7 | 104.3 | 95.0 |
| Domestic use, total | 105.8 | 104.8 | 106.6 | 104.0 | 93.9 |
| Exports, of which: | 103.7 | 110.2 | 103.3 | 99.5 | 76.0 |
| Exports of goods | 102.8 | 110.3 | 101.3 | 100.7 | 80.1 |
| Exports of services | 107.0 | 109.8 | 110.6 | 94.5 | 61.9 |
| Imports, of which: | 104.6 | 110.2 | 105.9 | 101.3 | 84.2 |
| Imports of goods | 104.6 | 110.4 | 105.1 | 102.5 | 85.0 |
| Imports of services | 104.6 | 109.2 | 110.2 | 95.2 | 79.7 |
| External balance of goods and servicesa) | x | x | x | x | x |
| Gross domestic product (GDP), total | 104.9 | 105.0 | 104.5 | 102.2 | 86.4 |
a) For these items the volume index is not applicable.
In the external trade of the economy a deficit of 53 billion forints was generated at current prices. The last time the external trade balance was negative was in the 4th quarter of 2008. The volume of exports was down by 24.0% and that of imports by 15.8%. In trade in goods, exports were 19.9% and imports 15.0% lower than a year earlier. Within the external trade of the economy, the exports of services (including tourism) dropped by 38.1% and their imports by 20.3%.
Actual final consumption contributed by 4.5 percentage points, gross capital formation by 1.4 percentage points and the balance of external trade as a whole by 7.7 percentage points to the 13.6% fall of gross domestic product in the 2nd quarter of 2020.
In the 2nd quarter of 2020 compared to the previous quarter, according to seasonally and calendar adjusted and reconciled data:
The performance of the economy decreased by 14.5%.
From the production approach, gross value added declined by 20.6% in industry, by 17.5% in construction and by 13.4% in services.
From the expenditure approach, household final consumption expenditure decreased by 11.8% and the volume of social transfers in kind from the government by 11.8%, while the actual final consumption of the government went up by 1.8% out of the components of actual final consumption. Gross fixed capital formation lessened by 13.8%. In external trade, exports decreased by 24.0% and imports by 16.9%.