Hungary’s trade balance showed a deficit of 475 million euros in April, the Central Statistical Office (KSH) said in a first reading of data released on Wednesday.
Hungary, an export-driven economy where trade surpluses are the norm, recorded a trade deficit for the tenth consecutive month, KSH said.
Exports increased by 12.1% per year to 11.052 billion euros and imports by 21.1% to 11.527 billion.
Trade with other EU Member States accounted for 77% of exports and 70% of imports.
Further deterioration expected
Magyar Bankholding’s chief analyst, Gergely Suppan, said that with growing investment and consumption, the foreign trade balance is expected to deteriorate further, but in the second half of the year it may stabilize with the alleviating the global chip shortage and bringing new production capacity online. Due to the war in Ukraine, the trade balance could end up being negative for this year, after a surplus of 1.9 billion euros in 2021, he added.
Századvég’s chief macroeconomic analyst, Gábor Regős, said the weakness in the automotive sector is proving to be a drag on export growth, while noting that consumption and investment are boosting imports.
Regős said price changes also affect the trade balance, as import prices are rising at a faster rate than export prices, due to a boom in global energy prices.
Erste Bank macroeconomic analyst János Nagy said monthly trade figures are expected to show a short-term deficit. Until the difficulties in the automotive sector ease, exports of goods cannot grow dynamically. Rising energy costs that are becoming persistent pose a downside risk, but from the second half of the year, exports could start to catch up with imports as the global economy recovers and thanks to the huge capacity expansions already announced. , he added.