Hungarian Industrial Output Plunges in April as Recession Looms
Hungary’s industrial output unexpectedly plunged in April as mobile phone and television production continued to fall, boosting the chances that the economy will enter its second recession in four years.
Output dropped a workday-adjusted 3.1 percent from a year ago after a 0.6 percent increase in March, the Budapest-based statistics office said today based on preliminary data. The median estimate of 14 economists in a Bloomberg survey was for 0.5 percent growth. Production fell 2.4 percent from March.
The economy contracted 1.3 percent in the first quarter from the previous three months, preliminary data released May 15 showed, as the euro area’s debt crisis reduced demand for the nation’s industrial exports.
“Essentially mobile phone and television production, which for a long time accounted for a big increase in exports, have been falling significantly for many months,” statistician Miklos Schindele told reporters.
The economy shrank 0.7 percent from a year earlier after a 1.4 percent expansion in the last three months of 2011. The statistics office will publish revised GDP data tomorrow.
The trend in industrial production and the first-quarter figure contrasts with government optimism about the economy’s outlook. Hungary’s economic ills are healing “surprisingly fast” and the country is sticking to market financing for its debt, Economy Minister Gyorgy Matolcsy wrote in an article for Heti Valasz newspaper today.
The economy, which has the highest debt level among eastern members of the European Union, asked for International Monetary Fund aid in November. Talks on a loan have yet to start as the Cabinet failed to amend a disputed central bank legislation to guarantee the institution’s independence.
Hungary’s economic decline in the first quarter showed signs of decoupling from Germany’s, its biggest export market. The German economy grew 0.5 percent from the fourth quarter, five times more than economists forecast, as exports to emerging markets offset waning euro-area demand.
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