BUDAPEST, Nov 12 (Reuters) - Hungary's economy expanded by a faster than expected annual 1.6 percent in the third quarter, helped by a lower base and a pickup in household consumption which added to the impact of strong exports. Hungary's household consumption expanded for the first time since early 2007, the Central Statistics Office said on Friday, adding that GDP grew by 0.8 percent from the second quarter. The preliminary, unadjusted annual growth of 1.6 percent beat analysts' consensus view of 1.1 percent, but beside the consumption growth, most of that difference was due to methodological changes introduced in September, statistician Peter Szabo said. The KSH will provide detailed third-quarter data next month. Szabo said the headline GDP figure was still supported by healthy industry output and exports, but the main difference was the strength in household spending. "Industry and exports are still going very strong, but... household consumption began humming as well," Szabo said. "This household consumption growth is mostly also due to the very low base this time last year, when growth was at its low point." Based on calendar-adjusted data, economic output also rose by 1.6 percent in annual terms in the third quarter after a 0.8 percent increase in the second quarter. "The detailed breakdown has not been published yet, but the upside surprise likely came from private consumption. Our forecast saw a rise only in the net export component. In other components near-stagnation levels or further contraction was estimated," said Gyorgy Barta at CIB Bank. "It seems that export and industry-related figures (which have been more than satisfying) outweighed the weakness seen in many other components.
Investments are still a source of great uncertainty." The stronger than expected Q3 figure prompted some analysts to say they would revise their 2010 GDP projections upwards slightly. The government expects the economy to grow by 0.8 percent this year which it expects to accelerate to 5 percent by 2013, helped by stronger domestic demand due to sharp income tax cuts, and also car manufacturing projects that come online by then. The central bank, the IMF and the independent fiscal watchdog, the Budget Council have said this assumption for 5 percent growth seemed too optimistic. The government imposed large windfall taxes on banks, retail, energy and telecoms firms from this year which experts said could curb investment and economic recovery. National Bank of Hungary Governor Andras Simor said on Thursday that the budget measures would do little to boost growth on the long term while posing fiscal sustainability risks. (Reporting by Marton Dunai) Keywords: HUNGARY GDP/ (firstname.lastname@example.org; +36 1 327 4742; Reuters Messaging: email@example.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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