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UPDATE 1-Hungary's November output fall worst in 3 years
January 8, 2013 / 8:31 AM / 5 years ago

UPDATE 1-Hungary's November output fall worst in 3 years

* November output -6.9 pct y/y, far worse than expectations

* Comes on the heels of disappointing Czech output data

* Could lend further ammunition to central bank rate cuts

BUDAPEST, Jan 8 (Reuters) - Hungary’s industrial output fell to a three-year low in November, official data showed on Tuesday, as new investments in the car sector were unable to compensate for a fall in other segments of industry.

Unadjusted output fell by an annual 6.9 percent, far worse than analyst forecasts for a 3.9 percent decline in a Reuters poll, dragging output for the first 11 months deeper into the red and confirming that Hungary was in recession.

It could lend further arguments to the National Bank of Hungary, which has cut interest rates by 125 basis points to 5.75 percent since August, to loosen policy further as it seeks to bolster an economy also stifled by government austerity.

The forint eased a touch after the figures.

The data, which lagged even the most pessimistic analyst forecast for a 6.6 percent decline, came a day after Czech output also disappointed, highlighting the risks to central Europe’s two most open economies amid the euro zone crisis.

New car sector investments by Germany’s Daimler and Audi in Hungary over the past years were the only green shoots in an otherwise dismal sector but even so did little to temper the decline, the Central Statistics Office said.

“The worst declines can still be seen in telecommunications and electronics manufacturing,” statistician Miklos Schindele told reporters.

“Vehicle manufacturing - which accounts for 20 percent of industrial output - is the only area capable of growth, however, that was unable to compensate for the rest.”

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