BUDAPEST: Hungary’s industrial output dropped for a second month in October, reinforcing doubts about the government’s growth target after retail sales also failed to meet expectations and underscoring the economic slowdown taking place in the European Union’s eastern wing.
Industrial production fell 2.1 percent in October from a year ago, the statistics office reported on Tuesday. That compared with an estimate for zero growth by eight economists in a Bloomberg survey. Output rose 2 percent from the previous month. Gross domestic product expanded 2.2 percent in the third quarter from a year earlier, up from an initial reading of 2 percent.
As Hungary’s industry faltered, October retail sales grew at their slowest pace since January, resembling results across the rest of the eastern EU. The trend has deepened amid plunging inflows of EU development funds that have undercut investment in Poland, Slovakia and the Czech Republic. Hungarian GDP is on track to expand at its slowest pace in three years in 2016, according to a Bloomberg survey, while Economy Minister Mihaly Varga said last week that a strong fourth quarter could keep the 2.5 percent annual growth goal alive.
“Industrial output fell almost across the board, including in car manufacturing,” statistician Miklos Schindele told reporters.
Bulgaria’s economy grew 3.4 percent from a year earlier in the third quarter, less than the 3.6 percent from April to June. Romanian GDP slowed its advance to 4.4 percent, from 6 percent in the second quarter and Slovakia’s expansion slowed a full percentage point to 2.4 percent, the lowest since the beginning of last year.
The forint was little changed at 313.86 per euro by 9:17 a.m. in Budapest. It has strengthened 0.5 percent this year, making it the best-performing central European emerging-market currency on the back of sovereign credit upgrades to investment category at all three major rating companies in 2016.
