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COUNTRY INSIGHTS

September CPI data positively surprising, but there is a twist in the story
HUNGARY · In Brief · 08 Oct 2019

The headline rate of CPI-inflation fell to 2.8% yoy in September from 3.1% yoy in the previous month. This has been the first below-target number since January. It is also a positive surprise, as the average of analyst expectations was 3% yoy, according to Portfolio.hu. And most importantly, the ...

Hungary in the centre of the Brexit endgame?
HUNGARY · In Brief · 06 Oct 2019

In a rather unusual story, two British newspapers (Telegraph and Express) reported Hungarian foreign minister Péter Szíjjártó and Hungary's ambassador to the UK to have been spotted as leaving the building of the UK Cabinet Office on Friday morning, around the time when PM Boris Johnson reportedl...

Excellent fiscal data, yet further BOP deterioration reported for H1 2019
HUNGARY · In Brief · 01 Oct 2019

Both the ESA2010 (accrual terms) general government balance and sectorial financial data for Q2 have been released today. Following indications by partial figures, which were available earlier, that the fiscal balance must have improved quite a lot, this new set of comprehensive data marks a 1.3%...

MNB: The forint can go wherever it wants
HUNGARY · In Brief · 24 Sep 2019

The Monetary Council decided today to keep all interest rates unchanged and to RAISE the Q4 target for unsterilised bank liquidity to HUF300-500bn, i.e. by HUF100bn from the Q3 target. At a press conference following the release of the communiqué, the Bank said that they are not at all worried ab...

An exciting Monetary Council meeting is due tomorrow
HUNGARY · In Brief · 23 Sep 2019

On Tuesday, September 24, the Monetary Council is scheduled to come together for a rate-setting meeting and to discuss the next quarterly inflation report. On this occasion, no-one expects any change in interest rates, and indeed, analysts seem to agree that no interest rate measure is likely at ...

Hungary ranks first in the EU’s league table on growth
HUNGARY · Report · 16 Sep 2019

According to Eurostat, Hungary recorded the highest GDP growth within the EU in Q2 this year, following a second place taken in this important league table in the previous quarter. Apparently, good growth performance in the face of a weak all-European cycle is a regional phenomenon, as the new EU...

The forint went to a new record low again
HUNGARY · In Brief · 11 Sep 2019

This morning, the forint weakened to EURHUF 332.15, a new record low. Apparently, yesterday's inflation data, which signalled the very likely continuation of loose central bank policy, and the rather unexpectedly revealed conflict between governor Matolcsy and finance minister Varga, had an impac...

August CPI-inflation somewhat mixed, but more good news than bad
HUNGARY · In Brief · 10 Sep 2019

The headline rate fell to 3.1% yoy from July's 3.3% yoy, mainly, though not exclusively, on lower food prices, on account of which consumer prices fell by a marginal 0.1% mom. The latter was partly seasonal, given the typically beneficial impact of the summer season on food prices, but not entire...

MNB governor calls for looser fiscal policy, pleased with the current policy line of the MNB
HUNGARY · In Brief · 06 Sep 2019

MNB governor Matolcsy spoke yesterday at the annual conference of the Hungarian Society of Economics. In his usual visionary style, he enlisted a large number of negative international phenomena from Brexit and East-West trade war to the weak German economy, Italy's problems, North-South conflict...

EURHUF reached a record high today
HUNGARY · In Brief · 29 Aug 2019

The EURHUF exchange rate reached an historic record high at 331.85 today, against which it has recovered a bit in later trade. The forint has never been this weak; so far its record low was last summer's short-lived 330.8 level.Almost immediately, the MNB was asked for comment by Reuters, but the...

Tomorrow's Monetary Council: Cautious optimism, no measure likely
HUNGARY · In Brief · 26 Aug 2019

The August rate-setting meeting of the Monetary Council is scheduled for tomorrow. Essentially, there are no analysts on the market who would expect any change of the base rate for now or indeed for the rest of 2019. Actually, no interest rate measure of any kind is expected for the rest of the y...

No change in the sovereign credit rating from Fitch and S&P on August 16
HUNGARY · In Brief · 18 Aug 2019

Both Fitch Ratings and S&P had a revision date for their BBB/Stable sovereign credit ratings for Hungary on August 16. However, both agencies refrained from changing the ratings on this occasion. S&P did not even pick up the issue, whereas Fitch confirmed its BBB/Stable, saying that Hungary deser...

It is time for a weaker forint in H2
HUNGARY · Report · 15 Aug 2019

The preliminary Q2 GDP data reflected some deceleration on unadjusted basis, but only very little, and even that was almost fully cancelled out by calendar and seasonal adjustments. Thus, GDP once again beat everyone’s expectation and showed in fact the strongest yoy growth rate in Europe. The li...

CPI-inflation down in July, convenient for the MNB
HUNGARY · In Brief · 08 Aug 2019

The headline CPI-inflation rate for July has been reported at 3.3% yoy this morning, just slightly down from 3.4% yoy in the previous month. Analysts, including us, expected no change at all. To a great extent, the little positive surprise came from the fact that fuel prices fell by 0.2% mom in J...

Two macro charts on the forint dilemma
HUNGARY · In Brief · 30 Jul 2019

The forint was fixed at EURHUF 327.84 today, its weakest ever level to the best of our recollection. As usual, we suspect that the current forint weakness is at least not entirely against the will of the MNB. At least this is what we read from the dovish comments made by the Monetary Council afte...

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