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Hungary vetoed EU borrowing for Ukraine, no decision on Hungarian matters today
HUNGARY · In Brief · 06 Dec 2022

The following screenshot, from a Twitter post by a Green Party member of the European Parliament, one of the leading critics of Hungary's Fidesz government there, shows finance minister Varga who, by saying what he is quoted here to have said, essentially vetoed the EU's common borrowing action f...

Fuel shortage has become serious, subsidised fuel prices will likely have to go
HUNGARY · In Brief · 05 Dec 2022

By last night, about a quarter of domestic petrol stations has run out of petrol and diesel, and the situation is threatening to get even worse. We have had this coming for a while. MOL, currently the only wholesaler of fuel in Hungary, has been saying for several months that its capacities are o...

EU Commission: dark grey smoke has risen in Brussels today
HUNGARY · In Brief · 30 Nov 2022

Well, the EU Commission has finally come out with its much-expected proposal on Hungary today, just as scheduled. On balance, it is more negative than positive, but not entirely negative from Hungary's perspective. And at any rate, the Commission did not say anything particularly surprising, espe...

The EU Commission is set to come forward with its proposal on the Hungarian rule-of-law procedure tomorrow
HUNGARY · In Brief · 29 Nov 2022

The widespread current expectation is that the Commission will propose to freeze Hungary's access to 65% of its transfer (= development grant) quotas under three major cohesion policy programs of the EU's common budget for 2021-2027, in a total value of €7.5bn. This would be the same proposal as ...

Moving slowly into recession
HUNGARY · Report · 25 Nov 2022

Preliminary GDP for Q3 was much stronger than suggested previously by the MNB’s frequently cited lead indicator. However, the economy is still moving into recession slowly, as shown by the marginally negative quarterly growth rate. Strengths in Q3 included industry and retail sales, whereas real ...

Absolutely no surprise at today's Monetary Council meeting
HUNGARY · In Brief · 22 Nov 2022

As we wrote yesterday, the regular monthly rate-setting meeting today was not expected to lead to any policy change, as the existing mix appears to be working fine for now. The Council exactly met this expectation, leaving the base rate at 13%, the interest rate corridor at 12.5-25%, and saying p...

Fuels restrictions today, rate-setting meeting tomorrow, EP resolution on Thursday
HUNGARY · In Brief · 21 Nov 2022

1. From today, MOL, essentially the only wholesaler of fuels in the country in these days, is not supplying those petrol stations, for which it is not contractually required to do so. This came after the incident that an energy supplier unit of the Friendship pipeline in Ukraine was hit by a Russ...

Q3 GDP: moving into recession but not so much as we have thought
HUNGARY · In Brief · 15 Nov 2022

GDP shrank by 0.4% qoq but grew by 4.1% yoy, by seasonally adjusted data, in Q3. This means that economy minister Nagy, who indicated a similar number a week ago, was right, whereas the MNB's so far quite reliable-looking WEAI index, on which we based our Q3 forecast, was dead wrong. The WEAI, pr...

Good news on the budget, bad news on politics
HUNGARY · In Brief · 13 Nov 2022

For short, the good news is that the central government reached a pretty much non-seasonal cash surplus of HUF101bn in October, pulling the ten-month cumulative deficit for this year down to HUF2590bn or an annualised 5.1% of GDP, down from 5.9% of GDP in January-September. The annual cash defici...

October CPI-inflation still shows acceleration, though less steep than in previous months
HUNGARY · In Brief · 09 Nov 2022

Figures for the headline rate were 2% mom, 21.1% yoy, the latter up from 20.1% in September, and above the 20.7% yoy median expectation of analysts asked in Portfolio.hu's poll. Core inflation rose to 22.3% yoy from the previous 20.7% yoy, on a 2.2% mom rise in October. Household energy rose by 6...

Economy minister suggests growth and inflation is stronger than generally expected
HUNGARY · In Brief · 08 Nov 2022 · 1 response

The macro news for today is economy minister Nagy's statement that GDP growth will likely reach a positive 4% yoy in Q3 and remain slightly positive in Q4, implying average growth of 4.5% for 2022. In addition, CPI-inflation is likely to go further up substantially in the coming months, to around...

Approval of Hungary's CAP plan by the EU Commission is an important step forward but no game changer
HUNGARY · In Brief · 07 Nov 2022

The news came today that the EU Commission had approved Hungary's plan to use its €8.4bn grant quota under the Common Agricultural Policy (CAP) section of the new 7-year EU budget. This is an important step forward, as previously no parts of Hungary's utilisation plan for the new budget and the R...

Hungary rejects president Putin's words that it may have territorial claims on Ukraine
HUNGARY · In Brief · 06 Nov 2022

A short while ago, president Putin was reported as saying that Poland, Romania and Hungary might have territorial claims on Ukraine, as large territories were taken away from these countries earlier, which now belong to Ukraine. The Hungarian Foreign Ministry responded as: "We do not regard as ap...

Industrial producer price inflation decelerates in September, for the first time in the last 12 months
HUNGARY · In Brief · 06 Nov 2022

Industrial producer prices rose by 1.8% mom, 42.7% yoy in September. The August data was +4.1% mom, +43.4% yoy. One could say that the deceleration was just marginal, as regards the year-on-year data at least. Yet, this was the first time over the last 12 months that a lower yoy number appeared t...

Adjustment, recession and disinflation
HUNGARY · Forecast · 26 Oct 2022

Preparing a well-argued, credible macro forecast is a highly challenging task these days because of the unusually high risk associated with geopolitical factors. Regarding the latter, we treat a further major escalation of the Ukrainian war, and a fundamental destabilization of Europe’s energy si...

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