Hungary exits recession with first-quarter GDP surprise

Hungary's GDP rose by 0.7 percent in the first quarter of 2013, the national statistics office KSH said Wednesday, ending the country's second recession in four years that began early last year.

The increase, which exceeded analysts' forecasts, was due to growth in the construction and agricultural sectors, KSH said, and compares to a fall of 0.4 percent in the last quarter of 2012.

Year-on-year, however, first-quarter GDP was down by 0.9 percent, KSH said.

Final first-quarter GDP figures will be released on June 6, KSH added.

Hungary's GDP fell by 1.7 percent in 2012, the first contraction since 2009, and down from 1.3 and 1.6 percent increases in 2010 and 2011 respectively.

The government forecasts annual growth of 0.7 percent in 2013 although the European Commission forecasts just 0.2 percent growth.

The Economy Ministry said in a statement following the announcement that the recession had ended in a technical sense.

Recent positive data on industrial orders and business and consumer confidence showed that further growth can be expected, the Ministry said.

"There will be slow growth in the first half of the year which will accelerate in the second," it added.

Zsolt Kondrat, an analyst with MKB Bank who expects a contraction of 0.1 percent in 2013, told state news agency MTI that the figures were not entirely a surprise as the final quarter results in 2012 had been poor both in Hungary and worldwide.

"A rebound in the first quarter was to be expected, but after such a fast correction, it isn't sure the momentum can be continued," he said.

The national currency the forint rallied on the news, climbing to 291.91 against the euro at 0900 GMT from 294.61 at market opening.