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Hungary Q4 GDP -0.4% q/q vs -0.7% in Q3
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Hungary follows Czech Republic into technical recession
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Romania Q4 GDP +1.1% q/q
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Slovakia Q4 GDP +0.3% q/q
Feb 14 (Reuters) - Hungary's economy fell into a technical recession in the fourth quarter while Romania ended 2022 stronger than expected as central Europe sought to soften the blow of high inflation to households and companies. The European Union's emerging east has been fighting off recession risks posed by soaring energy and food prices which have caused consumers to cut back. Firms at the same time are struggling to achieve order growth amid rising costs. Data at the end of January showed the Czech economy falling into a mild recession in the second half of last year.
On Tuesday, Hungary followed suit, posting a second consecutive quarterly contraction. Gross domestic product (GDP) fell 0.4% quarter-on-quarter, following a 0.7% decline in the third quarter. On a year-on-year basis, the economy grew by 0.4%, a sharp slowdown from 4.0% growth in the third quarter.
"The Hungarian economy fell into a technical recession," ING economist Peter Virovacz said. "For now we see a realistic chance that GDP will contract on quarterly terms in the first quarter of 2023 and then recovery can begin towards pre-crisis GDP levels." In Romania, the economy advanced 1.1% in seasonally adjusted terms in the final quarter of 2022, roughly keeping pace with growth posted in the third quarter. Growth accelerated to 4.6% year-on-year, above a Reuters poll forecast of 4.4%. Slovakia also posted quarterly growth of 0.3%, while expansion eased to 1.1% year-on-year, beating a forecast of 0.9% growth. Central Europe has seen signs of inflation peaking early in 2023, giving comfort to central banks which have shifted to a policy of holding interest rates steady after sharp tightening cycles in 2021-2022 when price pressures starting building. War in Ukraine following Russia's invasion compounded price pressures by shocking energy markets and driving up gas and electricity prices. Inflation has been strongest in Hungary, where the headline rate hit 25.7% in January. Separate data on Friday, showed Romania's inflation eased to 15.07% last month, from over 16%. (Reporting by Jason Hovet in Prague, Gergely Szakacs in Budapest, Luiza Ilie in Bucharest, Editing by Raissa Kasolowsky)
