Unexpected growth in Hungarian export
Foreign trade surplus in the first quarter has been the highest for 5 years: the surplus on the balance of external trade in goods amounted to 2,6 billion EUR.
Despite the third wave of the pandemic export growth in Hungary was unexpectedly high (3.3%) in the first quarter of 2021, and the balance of external trade due to a modest increase in import (1,1%) mitigated the decline in the GDP by 2 %. The expanded external trade of goods counteracted the low-trade-intensity of service sector, while imports grew more modestly than exports. Even though the elevated COVID-19 caseloads commodity trade was able to expand rapidly in the first quarter, the value of commodity export in HUF increased by 13.5%, while the value in EUR increased by 6.3% compared to the first quarter of 2020. Strengthened external demand, and the 15% growth in the export volume of machinery and transport equipment (which accounts 57% of the volume of the exported goods) boosted the volume of external trade of goods the most.
The recovery is clouded by uncertainty, which is reflected in the reduction of April data on industrial production and export volume: compared to the previous month export of goods decreased by 12%, and the industrial production shrank by 3,2%. According to the preliminary data of April, the value of industrial production also decreased in our 10 most important foreign trade partners (except for Austria, Italy and the Czech Republic), production in April was down by 1% on the previous month in Germany.