Hungary’s seasonally-adjusted industrial production dropped 0.8% m/m in February, as compared with consensus forecast of a growth of 3.5%. The expected growth was high as output had fallen in January too by 0.1% m/m due to assumed one-offs in the auto sector.
IP data for February, however, implies that the reading recorded in January might not have totally been a one-off, according to Commerzbank. It suggests that industrial output is slowing cyclically as was hinted in the country’s PMI that dropped to 50, added Commerzbank.
“After enjoying a strong couple of years on the back of strong euro zone demand for autos, Hungarian activity has calmed down, which supports our sub-consensus 2.2% GDP growth forecast for 2016”, noted Commerzbank.
This trend is also likely to underpin the central bank’s decision to resume the easing cycle, said Commerzbank.
The material has been provided by InstaForex Company – www.instaforex.com