Country Analysts

Istvan Racz
Former Director, Central Bank


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Recent Country Insights

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Fidesz' membership in the EPP is suspended, the party undergoes a rule of law investigation
HUNGARY - In Brief 21 Mar 2019
The political convention of the European People's Party decided yesterday to suspend Fidesz' membership in the organisation until a freshly appointed three-member committee investigates Fidesz' domestic activities, to find out if those are in conformity with the EPP's basic values, especially in ...

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January BOP fundamentals do not support the forint's existing strength
HUNGARY - In Brief 19 Mar 2019
The forint has continued to strengthen against the euro recently, up by 2.5% between end-2018 and today's MNB fixing. Obviously, this started with the MNB's verbal intervention on January 16, and has been maintained since then by the expectation of an eventual policy tightening by the central ban...

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It is high time to change the course of MNB policy
HUNGARY - Report 15 Mar 2019
The uptrend of consumer inflation continued at an accelerated pace in February. CPI-inflation now exceeds the MNB’s medium-term target by all existing measures, including core inflation adjusted for indirect tax changes, the central bank’s favorite index. Importantly, inflation rose in the face o...

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The government is proposing to make household bonds free of the income tax
HUNGARY - In Brief 13 Mar 2019
The finance minister yesterday handed in a proposal to the National Assembly, according to which the interest earned from household bonds, the special kind of government debt that is only available to domestic individuals, would be free of the flat 15% income tax, as regards any new series of suc...

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February inflation data sends a clear message to the MNB
HUNGARY - In Brief 09 Mar 2019
The recent uptrend of consumer inflation continued by all existing measures, and it even accelerated, in February. The direction was widely expected but the pace was not. Headline CPI-inflation was 0.6% mom, which pushed the yoy rate back up to 3.1%, following the 2.7% figures recorded in both of...

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The EPP is starting an exclusion procedure against Fidesz
HUNGARY - In Brief 06 Mar 2019
The European People's Party's management has just announced that it is starting an exclusion procedure against Fidesz immediately, after 13 member parties from nine different countries initiated to exclude PM Orbán's party from the organisation. The EPP's rulebook says that such a procedure must ...

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An ambitious plan from the MNB on government debt
HUNGARY - In Brief 02 Mar 2019
On February 27, MNB governor Matolcsy, who is reappointed now for another 6-year term in his office, starting with March 4 2019, revealed an ambitious and somewhat perplexing plan regarding government debt. He said that in the future, all government debt 'will have to be' in domestic hands, and t...

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Matolcsy to remain MNB governor, Pleschinger to stay on the MC for another six years
HUNGARY - In Brief 27 Feb 2019
Parliament's Economic Committee voted to support another six-year term for György Matolcsy as governor of the MNB yesterday, after PM Orbán proposed Mr. Matolcsy's reappointment to the president of the republic. The head of the Economic Committee also said that the committee's Fidesz majority was...

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The Monetary Council today: no policy change, eyebrows let just slightly lower
HUNGARY - In Brief 26 Feb 2019
It seems the Monetary Council does everything to provide the market with as little guidance as possible. There was once again no policy change announced after today's monthly rate-setting meeting, and they did care not to make any marked change in the language of the communiqué. In one little cha...

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