Hungarian economy expands 2 pct in 2016

Hungary's gross domestic product (GDP) grew by 2 percent last year from a year ago, official data revealed on Tuesday.

In the fourth quarter of 2016, the Hungarian economy rose by 1.6 percent year on year, according to a preliminary estimate released by the Hungarian Central Statistical Office (KSH).

Market-based services and farming contributed most of the growth. Industrial output, KSH said, was unchanged and the building industry continued to put a damper on growth.

The fourth-quarter GDP, adjusted for calendar and seasonal effects, posted a year-on-year increase of 1.5 percent. On a quarterly basis, the fourth-quarter GDP rose 0.4 percent from the previous quarter.

Peter Beno Banai, state secretary at the National Economy Ministry, said the numbers showed that the Hungarian economy is closing the gap between itself and the European Union average.

He also said the poor industry data were caused by a decline in EU funding, which he said was cyclic.

Banai said that consumption had risen in 2016, and employment and salaries were also up significantly.

The 2-percent growth for 2016 offers a strong foundation for higher growth in 2017, perhaps as high at 4 percent, he said.

The National Economy Ministry has calculated with a 4.1-percent GDP growth forecast in 2017 and a 4.3-percent rise in 2018, the ministry reported. Endit