In the first quarter of this year, the war in the Middle East had not yet had a visible impact on economic activity; economic growth strengthened. In the first quarter of 2026, GDP increased by 0.7% quarter-on-quarter (seasonally adjusted) and was 3.0% higher year-on-year (the latter was also significantly affected by last year’s low base effect). Growth exceeded expectations mainly due to stronger export activity (0.7% year-on-year), while import growth (1.5% year-on-year) remained higher than export growth, although it slowed compared with last year. Goods exports were 1.8% higher year-on-year, driven particularly by higher exports of pharmaceutical products and, following last year’s decline, by exports of road vehicles and metals. Exports of services declined (-2.9%). Moderate growth in private consumption continued (2.7% year-on-year). Households increased spending primarily on motor vehicles, non-food products, and tourism services both at home and abroad. Investment growth also continued (12.6% year-on-year), particularly in construction, while investment in equipment and machinery also recorded growth. Growth in government consumption strengthened somewhat in the first quarter (3.9% year-on-year), mainly due to higher expenditure on long-term care, increased employment in the general government sector, particularly in health and social work activities, and higher spending on goods and services.

Following a further monthly increase in March (seasonally adjusted), manufacturing output in the first quarter exceeded the level recorded a year earlier (by 1.1%). On a monthly basis, output increased across all groups of industries by technological intensity. In medium-high-technology and low-technology industries, average output in the first three months of the year also exceeded the levels recorded in the fourth quarter of last year (seasonally adjusted). Compared with the first quarter of last year, total manufacturing output was 1.1% higher (working-day adjusted), while it declined in all energy-intensive industries, in the manufacture of electrical equipment and, according to our estimate, in the pharmaceutical industry (output in the latter two industries had also declined in 2025). Output was also lower in certain low-technology industries (wood-processing and furniture, textiles and printing). Following a decline in the previous year, the manufacture of fabricated metal products and the manufacture of machinery and equipment recorded higher year-on-year output in the first quarter. After a prolonged period of contraction, output also increased in the manufacture of motor vehicles, trailers and semi-trailers.
At the beginning of the second quarter, the indicator of expected manufacturing output remained low (and below the level recorded a year earlier). More than half of the surveyed enterprises identified uncertain economic conditions as an important limiting factor, alongside insufficient (foreign and domestic) demand and shortages of skilled workers.

In March, the value of construction work put in place increased again (seasonally adjusted) and was also significantly higher than a year earlier (30%). After declining at the beginning of 2025, construction activity gradually strengthened over the year, peaking in October, before declining until January this year and strengthening again in February and March (seasonally adjusted). This dynamic was primarily driven by developments in civil engineering works.  
However, some other data suggest weaker growth in construction activity. According to VAT data, activity in the first quarter was 11% higher year-on-year, which is 10 p.p. lower than indicated by the data on the value of construction work put in place. Similarly, data on output in the manufacture of non-metallic mineral products, which is traditionally closely linked to construction activity, do not indicate such strong growth, with production declining by 3% year-on-year in the first quarter.

The war in the Middle East has not yet had a notable impact on the volume of goods trade or external trade prices; the current account surplus was only slightly lower year-on-year in the first quarter of this year. This was mainly due to the goods trade balance. Real exports of goods increased year-on-year, while imports grew even more strongly, and the terms of trade deteriorated slightly. We estimate that volume developments contributed EUR 38 million to the year-on-year decline in the goods trade balance in the first quarter (EUR 55 million), while the deterioration in the terms of trade contributed a further EUR 17 million. The services surplus was slightly higher year-on-year, mainly due to a higher surplus in trade in insurance services and transport services. By contrast, the surplus in trade in manufacturing services on physical inputs owned by others and the surplus in construction services trade were lower year-on-year. The surplus in primary income was lower mainly due to higher net interest payments by the government to the rest of the world. Meanwhile, the lower deficit in secondary income stemmed primarily from higher net receipts of premiums related to exports of motor insurance services. In March, the 12-month current account balance recorded a surplus of EUR 2.4 billion (3.5% of estimated GDP for 2026).

Electricity consumption in the distribution network was 3.0% lower year-on-year in April. Industrial consumption and consumption by other business consumers – both indicative of economic activity – decreased year-on-year by 3.5% and 7.4%, respectively, partly reflecting one fewer working day. By contrast, household electricity consumption increased year-on-year (1.6%).