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COUNTRY INSIGHTS

Industrial output fell, retail sales stagnated in January
HUNGARY · In Brief · 06 Mar 2024

Overall, the first data on how output and demand did early this year, reported this morning, was disappointing. In seasonally and day-adjusted terms, the volume of retail sales did not change from December, despite hopes (though no outright forecasts) that the initial improvement recorded in the ...

The forint continues its weak trend: here are two new negative factors
HUNGARY · In Brief · 05 Mar 2024

EURHUF continued to hover some 3% or even more above this year's starting level today. In addition to everything else known so far, two new factors have just shown up, which may reinforce the current, moderately negative sentiment towards the forint. First, the detailed Q4 2023 GDP data was publi...

Sharpening talk between the MNB and the government has a negative impact on the forint
HUNGARY · In Brief · 01 Mar 2024

The forint has weakened by 1-2% in EURHUF terms from its level held immediately before the Monetary Council's latest rate-setting meeting on February 27. This could be traced back to mainly to the acceleration of the monthly pace of rate-cutting, of course. But the MNB made an attempt to counter ...

MNB rate-cutting accelerated, but only temporarily
HUNGARY · In Brief · 27 Feb 2024

The Monetary Council reduced the base rate by 100 ps, to 9%, today, accelerating the monthly pace of rate cuts from the previously standard 75 bps. However, shortly after the meeting, vice governor Virág said that this acceleration was only temporary, and the MNB's expectation regarding the mid-2...

Analysts are divided on the rate-cutting prospects at tomorrow's Monetary Council
HUNGARY · In Brief · 26 Feb 2024

The stake for tomorrow's regular monthly rate-setting meeting is whether the Council opts for the standard 75 bps reduction of the currently 10% base rate, or it increases the speed slightly, to a 100 bps cut this time. Honestly, the difference is not that big from the point of view of long-term ...

Parliament ratified Sweden's NATO accession today
HUNGARY · In Brief · 26 Feb 2024

The National Assembly approved Swedish NATO membership with 188 yes and 6 no votes earlier today. As Hungary was the last member state to vote on the issue, Sweden is officially a member of NATO from now on. Previously, Swedish prime minister Ulf Kristersson paid a visit to Budapest three days ag...

Domestic politics suddenly come into motion
HUNGARY · Report · 21 Feb 2024

We have mostly good news on the energy situation. January, the outstanding peak of the heating season, was once again warmer than average, although not quite as warm as one year earlier. Domestic gas reserves are almost at their historic maximum for this time of the year, and European gas prices ...

Q4 GDP came out even weaker than expected
HUNGARY · In Brief · 14 Feb 2024

This morning, KSH reported its first estimate for Q4 GDP growth at 0% qoq, 0.4% yoy, implying a 0.8% decrease of GDP in full-year 2023, following 4.6% growth in 2022, all in real terms, on seasonally and day-adjusted basis. As usual, details have not been released at this stage; KSH made only a v...

A follow-up to last weekend's political story, and a preview of tomorrow's GDP data
HUNGARY · In Brief · 13 Feb 2024

As we reported on President Novak's sudden resignation on Sunday, we wrote that the case will not have immediate consequences on investors. This still looks correct, yet there has surfaced since then a completely unusual story, which may carry a currently unknown but potentially material signific...

President of the Republic resigned yesterday, with no immediate consequences for investors
HUNGARY · In Brief · 11 Feb 2024

President Katalin Novák announced her resignation yesterday. In addition, Judit Varga, former minister of justice and currently the leader of Fidesz' list for the upcoming European Parliament election resigned from all her positions, including a seat in Parliament, announcing her withdrawal from ...

Inflation surprised on the downside again
HUNGARY · In Brief · 09 Feb 2024

The headline CPI-inflation rate for January was reported at 0.7% mom, 3.8% yoy this morning, defeating analysts' median expectation of 4.2% yoy (even more our forecast of 4.5% yoy), and representing a sharp drop from 5.5% yoy in December. This means that inflation is now within the MNB's 2-4% med...

Preview for tomorrow's data release: year-on-year CPI-inflation is expected to have fallen sharply further in January
HUNGARY · In Brief · 08 Feb 2024

Local analysts asked in Portfolio.hu's survey have a median expectation of 4.2% yoy, following 5.5% yoy in December. In the Q4 inflation report, out in late December, the MNB predicted 4.8% yoy, but on January 30, right after the monthly rate-setting meeting, Mr. Virág said that it might have fal...

New data for December: poor industrial output, overcompensated by near-excellent retail sales figures
HUNGARY · In Brief · 06 Feb 2024

This morning, KSH has published mixed data for December. First the bad news: industrial output fell 0.3% mom, 8.9% yoy on seasonally and day-adjusted basis. The raw yoy figure was actually -13.7%, which seems disastrous, but there were two less working days in December 2023 than one year earlier....

The forint is under moderate downward pressure today, fiscal policy, trade data and Sweden's NATO accession may be the factors behind this
HUNGARY · In Brief · 05 Feb 2024

With EURHUF at 385-386, with an apparent slight mobility in the upwardly direction, one could legitimately say that the forint is under some moderate pressure today. For sure, this is nothing dramatic, yet the explanation may be interesting. Anyway, this state of the local currency appears to jus...

Hungarian veto on the EU's €50bn aid package to Ukraine has been withdrawn with unexpected ease today
HUNGARY · In Brief · 01 Feb 2024

Quite unexpectedly, but very positively from investors' point of view, today's extraordinary EU summit ended with a deal accepted by all member states, that means also by Hungary, in just a few hours after its start. Effectively, member states approved the original December proposal to provide Uk...

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