EU entry benefits trade balance

According to preliminary figures of the Central Statistics Office (KSH), Hungary’s foreign trade grew at a faster pace in 2004 than in previous years, with a 17% increase in export volume and 14% rise in imports. KSH figures show the growth of exports was higher than that of imports in each of the four quarters of 2004. The value of exported goods totaled Ft 11,094 billion (€45.8 billion), some 15% higher than in 2003, while the value of imports rose by 13% to Ft 12,064 billion. The country’s foreign trade deficit thus narrowed by Ft 82 billion to Ft 970 billion. At 92%, the relative value of exports against imports is the highest since 1992. The KSH said the favorable trade balance arose primarily as a result of significant growth in machinery and vehicle exports, which accounted for 62% of Hungary’s total 2004 exports. The 22% growth rate was the highest among the main product categories. As far as smaller product groups are concerned, Hungarian firms sold 28% more telecom and audio equipment than a year earlier. This trend was driven by a 40% increase in cell phone exports, which were particularly successful in the last four months of the year, accounting for over 10% of total exports. On the import side, the value of production and transportation equipment brought into the country was 20% higher year-on-year. The only time Hungary’s foreign trade balance was markedly worse during 2004 was in the months leading up to EU accession, which the KSH attributed to strategic purchases aiming to take maximum advantage of changes in customs regulations. Broken down by destination, the 2004 balance of trade between Hungary and the EU improved considerably in comparison with 2003, while the balance of trade with non-EU countries was worse than a year earlier.