Country Insights

Gsp in brief thumbnail
Unchanged deposit rate and a temporary measure to fix basic food prices
HUNGARY - In Brief 20 Jan 2022
The MNB has left the fixed interest rate for 1-week deposits for today's weekly tender unchanged at 4%. This means that there has not been any sterilisation rate increase since the start of this year.This decision seems to substantiate the suspected rule of thumb that the Bank refrains from raisi...

Gsp in brief thumbnail
Inflation remained at a 14-year peak in December, beating forecasts once again
HUNGARY - In Brief 14 Jan 2022
Forecasts by private sector analysts (with a median value of 7.1% yoy) and by the MNB (6.9% yoy given in the Q4 inflation report of late December) were defeated again by the actual 7.4% yoy headline rate of CPI-inflation in December, as reported today. This was the same number as in November, whi...

Gsp in brief thumbnail
No rate hike today, analysts expect slightly lower CPI-inflation for December
HUNGARY - In Brief 13 Jan 2022
The weekly deposit tender is held by the MNB today. The fixed interest rate for the tender was set at 4% again, unchanged from last week. Looking at the forint's position at EURHUF 355, the lack of any further rate hike this time is genuinely unsurprising. Indeed, the forint has appreciated sharp...

Gsp in brief thumbnail
Central government 2021 cash deficit a bit lower than predicted
HUNGARY - In Brief 11 Jan 2022
Preliminary actuals show that the central government's cash deficit for 2021 ended up at HUF5102bn or 9.5% of GDP. This was slightly lower than the HUF5196bn annual deficit that the Finance Ministry predicted in its late-December forecast. The Ministry wrote in its announcement of the actual figu...

Gsp in brief thumbnail
Industrial output and prospects seem improving
HUNGARY - In Brief 10 Jan 2022
The performance of the industrial sector has been a genuine weak point lately, because of the global supply problem related to semiconductors, hitting car manufacturing and to a lesser extent the electronics industry.Against this backdrop, the latest output and PMI data reflects material improvem...

Gsp in brief thumbnail
First time since late November: no rate hike at today's 1-week deposit tender
HUNGARY - In Brief 06 Jan 2022
The 1-week deposit rate, which currently plays the role of the effective sterilisation rate, remained unchanged at 4% at today's tender.This is very telling. In late November, when the sterilisation rate was separated from the base rate again, the MNB said that its decisions to set the 1-week dep...

Gsp in brief thumbnail
Covid's 4th wave is over, but Omicron is coming through the gates
HUNGARY - In Brief 06 Jan 2022
There is good news and bad news once again. The former is that daily new cases, hospitalisations, patients in serious condition, virus test hit ratios have all fallen back substantially from the heights of the local 4th wave, seen in November. The latter is that there is no peace on the Covid fro...

Gsp in brief thumbnail
Cumulative Q1-Q3 2021 fiscal deficit reported at 4.1% of GDP
HUNGARY - In Brief 04 Jan 2022
At first glance, this sounds as good news. The corresponding-period figure for 2020 was 4.8%, so the deficit ratio fell moderately. And we are talking about the Eurostat-methodology, accrual terms data for the whole government sector, that is the single most important fiscal macro indicator. So i...

Gsp in brief thumbnail
The 1-week depo rate ends the year at 4%
HUNGARY - In Brief 30 Dec 2021
The MNB held this year's last 1-week deposit tender today. On this occasion, it set the fixed interest rate for the tender at 4%, 20 bps up from last week's level. This was pretty much unsurprising, after exactly the same amount of increase a week ago.In total, the Bank has raised the 1-week depo...

Gsp in brief thumbnail
It is Thursday, so the 1-week depo rate goes higher again
HUNGARY - In Brief 23 Dec 2021
At today's regular 1-week deposit tender, the MNB set the fixed interest rate, at which it accepted unlimited bids as usual, at 3.8%, up 20 bps from last week's level. So far, this rate, which is the effective sterilisation rate , has been raised at each week's tender since the sterilisation rate...

Gsp in brief thumbnail
Next year's fiscal deficit target lowered to 4.9% of GDP
HUNGARY - In Brief 23 Dec 2021
Rather than going home to decorate the Christmas tree or completing the selection of gifts for the kids, people in the Finance Ministry and up on the Castle Hill of Budapest appear to be still busy working.Yesterday's second important announcement, from the Finance Ministry, said that based on a ...

Gsp in brief thumbnail
Government cabinet decided to halt the rise of interest rates on households' mortgage loans
HUNGARY - In Brief 22 Dec 2021
Today, the government cabinet decided to freeze the interest rates of existing (= not new) variable-rate mortgage loans at the end-October, 2021 level for the whole of H1 2022. This means that banks will not be able to charge more than this level even if the loan contract allowed them to do so.Po...

Gsp report report thumbnail
An ominous collection of threats: Omicron, microchips, inflation, fiscal policy and the EU
HUNGARY - Report 20 Dec 2021
Unlike in previous months, there is some important good news to report on Covid. The local 4th wave of the disease seems to have passed its peak in late November. At present, all leading Covid indicators are improving, essentially thanks to the re-enforcement of face masks and to more effective v...

Gsp in brief thumbnail
The 1-week deposit rate went to 3.6% today, just as promised
HUNGARY - In Brief 16 Dec 2021
Today's 1-week deposit tender has brought about to the second MNB interest rate decision this week, which is kind of a nice performance in itself.This time around, the 1-week deposit rate, which is now the effective sterilisation rate, rose by 30 bps, to 3.6%. This was no surprise at all, after M...

Gsp in brief thumbnail
The MNB raised the base rate & interest rate corridor, ended quantitative easing
HUNGARY - In Brief 14 Dec 2021
The Monetary Council held its regular monthly rate-setting meeting on December 14, slightly earlier within the month than usual, because of the upcoming holiday season. Essentially, it did three things: it discussed the quarterly inflation forecast, took interest rate decisions and discussed poli...