Hungary, 2022 Q1

The Hungarian economy surpassed in the 1st quarter of 2022 the one year earlier low base by 8.2%, and all in all it was to the same extent (8.5%) more than the three years earlier level, when the pandemic was not present yet. Services represented the most significant component of the growth compared to the 1st quarter of 2021 (5.3 percentage points, see figure 1), their gross value added increased by 9.9%. The actual consumption of households triggered the growth on the expenditure side (by 7.0 percentage points), strengthened by extra sources such as the income tax refund for families with children, as well as the payment of the 13th month pension.

Figure 1
The scale of contribution to the GDP volume change on the production and expenditure side, 1st quarter of 2022

The first three-four months of the year witnessed significant price hikes in the Hungarian economy. This trend was significantly impacted by the world political and economic processes, such as the price increases on the raw material and energy resources markets as an effect of the war in Ukraine, furthermore by difficulties in transportation and parts supply. Consumer prices grew in Hungary during the January-April period by 8.5%, following the 3.6% rise in the first four months of 2021. The price of food increased significantly in one year (by 13%) as well as that of fuel (16%), the latter being impacted by the HUF depreciation too, which was more considerable, 10% against the USD. Industrial producer prices grew in the 1st quarter by 24%, within it energy industry, representing smaller proportion, increased to 1.9-fold compared to the January-March 2021 level. Construction prices surpassed the one year earlier level by 21% in the 1st quarter, adding to the approximately 10% increases during the first quarters of the previous years. Among the sectors agriculture registered the highest price level increase, 34%, within it the crop and horticultural products’ price hike (38%) surpassed that of animal products (24%).

Among the divisions industrial output increased by 5.5%, within it electrical equipment production grew by 13%. This hike in output continued to be the result of the growth in electric engines and batteries production. Car manufacturing, in contrast, decreased by 3.4%, basically due to the shortages in parts supply. All in all the volume of industrial production was about one tenth higher than three years earlier.

Figure 2
Role of certain economic fields in the 8.2% GDP volume increase, 1st quarter of 2022

As in industry the production volume in construction grew as well (by 16%) in the 1st quarter, in spite of the fact that the number of dwellings built (4.5 thousand) lagged behind the January-March 2021 data by 26%. In the first three months of the year the volume of new construction contracts expanded by 7.9% year-on-year, the end of March volume of contracts surpassed that of the one year earlier by 6.4%.

Tourism, the division particularly affected by the pandemic is showing signs of recovery, the January-March tourism night turnover at the accommodation establishments was 5.2 times more year-on-year, at the same time it lagged behind the three years earlier data by 32%. The performance of passenger transport also grew significantly (the local one by one and a half time, the intercity by 69%), but it still didn’t reach the pre-pandemic level. Freight traffic performance decreased at the same time by 4.6% compared to the 1st quarter of 2021, and it was still behind the pre-pandemic level. The calendar effect adjusted volume of retail trade, in contrast, surpassed even the levels of the 1st quarters of 2021 and 2019 (by 10% and by 14%). A significant component of the change in relation to the previous year was the 27% turnover increase in car fuel.

Regarding labour market: the 74.0% rate of employment of the 1st quarter surpassed by 2.0-2.2 percentage points the one-three years earlier data, and it represents, at the same time, a multi-year record in the 1st quarter time series. The January-March average of unemployment rate was 3.8%, being 0.7 percentage points lower year-on-year, however slightly surpassing (by 0.3 percentage points) the pre-pandemic, 1st quarter of 2019 one. The role of home office increased compared to the pre-pandemic situation, in the 1st quarter of the present year 8.0% of the employees aged 15-64 worked, at least on occasion, from home, in contrast with the three years earlier state, when this number was only 2.0%. (The proportion of home office work was the highest, 15%, during the first wave of the pandemic, in April-June 2020). Net average earnings of employees in January-March – HUF 338 thousand – was 21% higher year-on-year, a 12% real wage increase could be calculated based on it.

Out of the population number determining factors the number of births decreased by 12%, that of deaths by 13% compared to the first three months of 2021.The significant decline in the number of deceased is related to the high base value, caused by the peak of the third wave of the pandemic starting in March last year. During the first three months the natural decrease of the population was 18 thousand people, 14% lower than the outstanding January-March 2021 value.

Figure 3
Number of deceased by month

Further data, information

Contact details:
Contact us!
Telephone: +36 (1) 345 6789