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Tuesday, August 05, 2008

Hungary's Exports Fall In May 2008 (Updated - Detailed Results)

According to preliminary figures from the Hungarian Statistical Office (KSH) Hungarian exports actually FELL on a month on month basis in May. They fell from 1673.4 billion HUF in April to 1513,3 Billion HUF in May. That's about a 7% drop m-o-m. For an export driven economy with weak domestic demand and reducing government expenditure, this is pretty well-nigh a disastrous reading. It also puts all the recent speculation about how "high" the forint can rise into some sort of more realistic perspective.

As a measure of the level of "interlocking" which is now in place with Germany, we should note that German exports also declined month on month in May, but in this case only by 3.2 percent from April, It is still however the biggest monthly drop in German exports since June 2004. My recession risk assessment for the German economy can be found here on RGE Monitor.

In Euro terms exports in May were EUR 6,096.5 m, up by 6.7% year on year, (but still down on Aprils EUR 6,431.8 m) and down from the year on year growth rate of 22.8% registered in April. Imports were EUR 6,049.4 m, 6.2% more than in the same month of 2007, while in April the growth was 18.2%.

The May trade surplus was EUR 47.1 million which compares with a surplus of EUR 54.2 million in April and EUR 20.4 million in May 2007.

Detailed Results 5 August 2008

The KSH have now published the revised detailed trade data for May 2008. Hungary posted a trade surplus of EUR 27.5 million in May, according to final data, some EUR 20 million less than the preliminary figure.

The EUR 27.5 m surplus booked in May is practically the same as it was in the same month of 2007, which means Hungary's trade balance failed to improve over the year.

Year on year growth in the volume of exports was only 2%, which suggests that the downturn in the eurozone and other EU countries is now leaving its mark on Hungary's external sales. The April figures now seem to be a complete anomaly - associated with the timing of Easter perhaps - and if we take the March - May 3 month average we only get about 8% year on year growth, which while it isn't a bad number, is well down on the twevlve month average pre March. And we need to bear in mind that moving forward the number may drop even further. In which case Hungary, as an exports driven economy is going to get virtually no headline GDP growth moving forward as agriculture finally settles down again.

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