Hungary posts EUR 500 m trade surplus, exports remain steady
December 9th, 2011
The EUR 497.4 m October surplus comes after a EUR 740.6 m surplus in September and is the fourth-smallest monthly surplus this year. The fresh print is no surprise as it reflects the processes we have been witnessing for some time now. The adjustment of the Hungarian economy has not stopped; this is what caused a persistent decline in import demand.
In January-October Hungary exported nearly EUR 5.95 billion more goods than how much it imported. The intensity of the adjustment process - which started in 2007 and got a new impetus at the end of 2008 - is best attested by the fact that while the trade balance showed a deficit of EUR 4 bn in 2003-2004, the end-2011 figure will most likely show an all-time high surplus of over EUR 7 bn.
Exports grew by 5.3% yr/yr in October, while imports increased by 4%. The export-import gap (i.e. the difference between their respective yr/yr increases) shrunk to 1.3 percentage points in October from 3.2 ppts September, but it is stably in the positive territory.
At the same time the dynamics of export growth is not how it used to be. The yr/yr index is still positive because there was some growth at the beginning of Q3, but in the past few months - as the seasonally adjusted data indicate - it was rather stagnation or a growth that is hardly visible for the naked eye.
Considering the trends on external markets Hungary’s exports should drop but a contraction should be offset by new vehicle production capacities. This way we can still expect a moderate rise in exports, without which the local economy would inevitably plunge into recession.
From www.portfolio.hu
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