WOOD Flash – Hungary, Poland and Romania macro: 3Q GDP – Hungary surprises positively

The GDP preliminary data released today (13 November) were broadly in line with what the sentiment surveys have been suggesting and relatively close to the GDP prints published in previous weeks. Romania surprised us negatively by presenting a 6% yoy contraction in the quarter, but we believe that our 2020E estimate, at -5.3%, remains accurate as October’s sentiment softens and the COVID-19 related restrictions remain lower than during the first wave. We expect the 4Q20E economic performance to fall by 7-8% yoy, between the 2Q20 and 3Q20 prints. Both Hungary and Poland surprised us positively: after the sharp contraction in 3Q, Hungary GDP stood at -4.6% yoy (above the Czech Republic and Romania); with the industrial sector improving and softer COVID-19 related restrictions than in March-May, we have moved our 2020E GDP estimate upwards, from -7.1% yoy to -6.2% yoy. Finally, Poland’s GDP fell by 2% yoy, performing significantly above its CE4 peers and our expectations (-4.1% yoy). However, the COVID-19 related restrictions imposed on activity have been increased recently to levels close to those observed earlier this year; therefore, we believe that our 2020E assessment remains accurate (-3.8%), implying around 7% yoy in the last quarter of the year.