Page 29 - CE Outlook Regions 2023

2.3.4 Industrial production

Hungary’s export-oriented industry, with a 70% plus export ratio,
bounced back dynamically after the pandemic as supply disruptions
eased. Industrial exports remained stable throughout the year even as
external markets slowed. The war and rising energy prices had so far
mitigated the impact on the sector, which grew 9.6% y/y in Q3 and by
6.7% in Q1-Q3. Analysts expect industrial growth to decelerate from
9.6% in 2021 to 5-6% in 2022.

The main driver of growth was electronics and the vehicle industry. The
production value of the vehicle sector rose 23% y/y in the first nine
months, to HUF8.7 trillion (€21.8bn), and for the first time may exceed
HUF10 trillion. The industry accounts for 5% of GDP, 25-30% of the
manufacturing sector output, and employs 155,000 people.

The outlook for 2023 remains uncertain, but capacity expansions in the
automotive and chemicals sectors could lead to a rebound in
manufacturing output, provided that the global economy recovers
quickly, analysts said. The order book of the industry was 21% above
last year’s level at the end of October.

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