Country Analysts

Istvan Racz
Former Director, Central Bank


Click here to access the latest Macroeconomic Databank

Recent Country Insights

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Nearly excellent current performance, moderately positive medium-term prospects
HUNGARY - Forecast 18 Jan 2019
In our new quarterly forecast, we do not take into account the possible negative impacts of major international economic, financial or political debacles such as e.g. a potential no-deal Brexit on 29 March. Even though the British parliament’s NO vote to the government’s Brexit proposal a few day...

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Important policy statement from the MNB
HUNGARY - In Brief 16 Jan 2019
Speaking at the Euromoney conference in Vienna, MNB vice governor Nagy said that in case their 'core inflation adjusted for the impact of changes in indirect taxes' indicator reaches or exceeds 3% yoy, the MNB will conclude that inflation has reached the Bank's medium-term target on a sustainable...

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Inflation dropped as expected, yet there is enough bad news
HUNGARY - In Brief 15 Jan 2019
The headline rate of CPI-inflation fell to 2.7% yoy in December from 3.1% yoy in the previous month, in line with consensus expectation. So far the good news...The bad one is that there was more in the total monthly drop of the CPI (by 0.3%) caused by fuel prices (-6.9%) than we expected, whereas...

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Headline CPI-inflation expected to have fallen to 2.7% yoy in December
HUNGARY - In Brief 14 Jan 2019
Tomorrow at 9am BUD time, the KSH is scheduled to publish its consumer price data for December. Analysts contributing to's poll expect another sharp drop by the headline rate, to 2.7% yoy from November's 3.1%yoy, and we agree with that forecast. In our own spreadsheet, this result wo...

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The Finance Ministry confirmed a series of good news on 2018 fiscal results
HUNGARY - In Brief 12 Jan 2019
Over the last few weeks, a series of good news on the 2018 government budget results were announced, leaked, rumoured or suggested by various sources. Yesterday, the Finance Ministry confirmed a few of them, minister Varga and state secretary Banai having been the speakers. In the main, they said...

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The government sector balance was close to zero again in January-September 2018
HUNGARY - In Brief 03 Jan 2019
KSH reported the government sector balance, by ESA-2010, i.e. on accrual basis, at a deficit of 0.4% of GDP for the first three quarters of 2018. This was in fact almost the same number as the 0.6% of GDP actual recorded in January-September 2017. The message is that government finances have inde...

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Relatively good news for inflation: statutory minimum wages were announced for 2019-2020
HUNGARY - In Brief 30 Dec 2018
Finance minister Varga announced this morning that statutory minimum wages will be raised by 8% both in 2019 (starting from January) and in 2020. This refers to both existing wage thresholds, the lower one for unskilled labor and a higher one maintained for unskilled labor alike. The news came af...

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The European Commission is finally paying its dues, creating abundant liquidity for the government
HUNGARY - In Brief 23 Dec 2018
Although neither the government, nor the European Commission are specifically saying so, the publicly available cohesion policy data of the latter make it clear that the EU Commission has just paid very substantial amounts of transfers due to Hungary. Our own estimates show the payments, in Decem...

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Correction of fuel prices amid rising core inflation creates policy uncertainty
HUNGARY - Report 18 Dec 2018
Executive summary Q3 GDP growth was revised higher in the second estimate, pushing the seasonally adjusted year-on-year rate slightly above 5%. Growth is increasingly propelled by domestic demand rather than the export-driven industrial sector, which suggests that the trade balance must significa...