CEE ECONOMY-Hungary leads central Europe in Q2 as recovery takes off
Aug 17 (Reuters) - The Hungarian economy grew 2.7% quarter-on-quarter in the April-June period to lead central Europe's recovery, data showed on Tuesday, with industry a driving force even as the key car sector grapples with global chip shortages.
The region's economies shifted into a higher gear in the last quarter, coming a year after the coronavirus pandemic hit the hardest and now that lockdown restrictions in retail and hospitality have largely ended.
Hungary's quarterly rise outpaced a 2.0% expansion seen in neighbouring Slovakia and a 1.8% quarter-on-quarter gain in Romania, according to preliminary figures also reported on Tuesday.
Last week, the region's largest economy Poland reported a 1.9% quarter-on-quarter rise while Czech quarterly growth came in below expectations at 0.6%.
In year-on-year terms, Hungary's 17.9% growth and Romania's 13.0% rise were both the fastest on records dating back to 1996. Slovak growth of 9.6% was the fastest since 2007.
A low base was the main factor for annual comparisons as central Europe's economies were hammered in the second quarter of 2020 with many factories idled to help fight the spread of the virus.
Manufacturers, though, have learned to adapt and remain open through subsequent waves of infections, though global supply and transport bottlenecks have weighed on the sector, with chip shortages causing some carmakers to cut back production.
In the second quarter, gradually reopening of shops and restaurant has helped shore up economic activity.
"The reopening of the economy had a positive effect on all branches of the (Hungarian) economy," Gergely Suppan, an analyst at Takarekbank in Budapest, said.
"Had it not been for the global chip shortage that forced Audi and Daimler to halt production, GDP growth would have been even bigger."
(Reporting by Jason Hovet in Prague, Anita Komuves and Gergely Szakacs in Budapest, and Luiza Ilie in Bucharest Editing by Tomasz Janowski)
