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COUNTRY INSIGHTS

Strong-forint policy has become more accentuated
HUNGARY · Report · 11 Sep 2025

The authorities’ desire to reduce inflation before the election has become more evident than at any time previously. The government cabinet has decided to extend the existing caps on retail margins, and the Economy Minister has hinted at a postponement of an excise tax increase originally planned...

Russian drones in NATO airspace: Hungary unaffected, PM Orbán has taken side with Poland
HUNGARY · In Brief · 10 Sep 2025

The violation of Polish airspace by more than a dozen Russian drones (all of which have been intercepted by US and Polish airplanes) during the night did not affect Hungary (see the chart below). PM Orbán has issued a brief statement in the morning: 'Hungary expresses its full solidarity with Pol...

August CPI data marks no change in inflation prospects
HUNGARY · In Brief · 09 Sep 2025

The headline rate was 0% mom, 4.3% yoy, the latter unchanged from the previous month. Core inflation moved a bit down, to 3.9% yoy from July's 4% yoy, whereas non-fuel inflation rose a bit, to 5% yoy in August from 4.9% yoy in the previous month. Note: Yoy changes in percent, data right of the ve...

An unusual development: strengthening industrial output and weakening retail sales in July
HUNGARY · In Brief · 07 Sep 2025

In recent months, this typically went the other way round. But anyway, the facts are the following: Industrial output grew by 2% mom in July, reducing the yoy decrease to 1.6% in that month, after a 3.6% yoy decrease in Q2. The fixed-base chart (Dec 2010 = 100; source: KSH) looked like this: So, ...

There seems to be peace and fundamental agreement between the Economy Minister and the MNB Governor
HUNGARY · In Brief · 04 Sep 2025

This is something we have not seen for a long time, and especially not in the last almost two years of Mr. Matolcsy's period at the MNB. The domestic event of the week is the regular annual gathering of the Hungarian Economic Association, a high-profile conference where both Minister Nagy and Gov...

Mr. Nagy on fiscal policy and rating agencies in the election period
HUNGARY · In Brief · 04 Sep 2025

Following a brief episode of successful heart surgery during the summer, Economy Minister Márton Nagy is now back in office and is fully operative. In the past few days, he paid a visit to London, primarily to talk to credit rating agencies, as he has just informed the public. Returning from that...

Business as usual: no policy change at today's monthly Monetary Council meeting
HUNGARY · In Brief · 26 Aug 2025

The MNB base rate and the interest rate corridor have been kept unchanged, at 6.5% and 5.5-7.5%, respectively, and the Council saw no reason to change its forward guidance either. This outcome was in conformity with the MNB's previous communication and analyst expectations alike. In Portfolio.hu'...

Confirming the obvious: price caps will be extended beyond end-August
HUNGARY · In Brief · 24 Aug 2025

We had this coming from the first instance. PM Orbán has just announced that the government's administrative caps on the gross retail margins of certain food items and household goods will be upheld after August 31, when, in the legal sense at least, those measures were set to expire. He did not ...

An update on the Druzhba oil pipeline
HUNGARY · In Brief · 23 Aug 2025

During the night of August 22, the Unecha pumping station in the Bryansk region of Russia was hit by Ukrainian UAV drones, causing the whole station to go up in flames, as everyone can check by seeing the video published by the Ukrainian military. This was the fourth attack against the Druzhba oi...

The government is interfering with monetary policy once again
HUNGARY · Report · 19 Aug 2025

The often incalculable consequences of current US trade policy have proven to be quite easily calculable lately, even though probably for a short while only. Mr. Trump’s threat to impose penalty-level import tariffs on European goods has been averted, with the initially announced tariffs halved, ...

July inflation data was moderately disappointing
HUNGARY · In Brief · 08 Aug 2025

The headline rate was reported at 0.4% mom, 4.3% yoy, the latter down from 4.6% in June, core inflation fell to 0.4% mom, 4% yoy, down from 4.4% yoy in the previous month, and non-fuel inflation was 0.4% mom, 4.9% yoy, the latter falling only marginally, from 5% yoy previously: This was somewhat ...

Inflation warning: Expect the year-on-year headline rate fall significantly in July
HUNGARY · In Brief · 07 Aug 2025

CPI-inflation data for July is due in the morning tomorrow. In June, the yoy headline rate was 4.6%. Against that, analysts, including us, expect a material reduction to 4.1% yoy (the median value in Portfolio.hu's monthly analyst poll). This reduction would be due essentially to two base effects...

Industry and retail sales figures for June: no trend change seen, business as usual
HUNGARY · In Brief · 06 Aug 2025

Preliminary industrial output and retail sales data (volume growth on sda basis) for June has been reported this morning. A quick look at the fixed-base chart below (volumes, Dec 2010=100, source: KSH) serves with the easy conclusion that there has not been any change in the long-standing trends,...

Q2 GDP data met expectations, exceptionally
HUNGARY · In Brief · 30 Jul 2025

As we reported yesterday, all forecasters expected GDP growth to be slightly positive in Q2, after being similarly negative in Q1. And they have proven to be right. In fact, real GDP growth reached +0.4% qoq, +0.2% yoy, the former after a revised -0.1% qoq in the first quarter. This also means th...

Tariffs, secondary tariffs and Q2 GDP
HUNGARY · In Brief · 29 Jul 2025

The preliminary Q2 GDP data is due tomorrow. Following -0.2% qoq, -0.4% yoy in Q1, Portfolio.hu's analyst poll shows a median forecast of 0.2% qoq, 0% yoy for Q2, with 0.7% average growth for this year and 2.7% growth for 2026. A short while ago, our quarterly forecast update included a slightly ...

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