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Dynamics of the trade balance and developments in exports and imports

Author

Listed:
  • Katalin Bodnár

    (Magyar Nemzeti Bank (the central bank of Hungary))

  • György Molnár

    (Magyar Nemzeti Bank (the central bank of Hungary))

  • Gábor Pellényi

    (Magyar Nemzeti Bank (the central bank of Hungary))

  • Lajos Szabó

    (Magyar Nemzeti Bank (the central bank of Hungary))

  • Judit Várhegyi

    (Magyar Nemzeti Bank (the central bank of Hungary))

Abstract

This article examines how the trade balance (or net exports) changed during the crisis. In the early-to-mid-2000s, Hungary ran a trade deficit as external indebtedness grew. Since the crisis, balance sheet adjustments by economic agents have substantially reduced imports for consumption and investment purposes, whereas exports (and imports of interim products) grew during the same period. As a result, the trade balance moved into a large surplus. However, in this fifth year of the crisis, exports still remain below their pre-crisis levels, due not only to cyclical factors, but also potentially to long-term, structural reasons. To reduce external debt in the medium term, export-led growth will be required, which may come from faster growth on Hungary’s export markets, an increase in market share or higher domestic value added of exports. Our analysis has identified challenges in all three areas.

Suggested Citation

  • Katalin Bodnár & György Molnár & Gábor Pellényi & Lajos Szabó & Judit Várhegyi, 2013. "Dynamics of the trade balance and developments in exports and imports," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 8(Special), pages 37-45, October.
    • Handle: RePEc:mnb:bullet:v:8:y:2013:i:special:p:37-45
    as

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    File URL: http://www.mnb.hu/letoltes/bodnar-molnar-pellenyi-szabo-varhegyi.pdf
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    References listed on IDEAS

    as
    1. Konstantins Benkovskis & Julia Wörz, 2012. "Non-Price Competitiveness Gains of Central, Eastern and Southeastern European Countries in the EU Market," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 27-47.
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    3. Eichengreen, Barry & Gupta, Poonam, 2012. "The Real Exchange Rate and Export Growth: Are Services Different?," Working Papers 12/112, National Institute of Public Finance and Policy.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    trade balance; export performance; goods exports; services exports; import adjustment;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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