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COUNTRY INSIGHTS

GDP growth indeed slowed down in Q2 but better than expectation
HUNGARY · In Brief · 14 Aug 2018

Q2 GDP came out at 0.9% qoq, 4.4% yoy this morning, decelerating from 1.2% qoq, 4.7% yoy in Q1. This means that analysts correctly expected growth to slow down but undershot the actual by their average expectation of 4.2% yoy (see yesterday's in-brief from us).As no details are made available on ...

GDP growth is expected to decelerate in Q2
HUNGARY · In Brief · 13 Aug 2018

Q2 GDP growth is scheduled to be reported in first estimate early tomorrow. Analysts in Portfolio.hu's poll expect 4.2% yoy growth on sda basis, down from 4.7% yoy in Q1 and the 4.9% yoy cyclical peak in Q4 2017. We believe this is largely correct, but we would not be surprised at a somewhat lowe...

July inflation data marks significant negative change
HUNGARY · In Brief · 08 Aug 2018

CPI-inflation was reported at 0.3% mom, 3.4% yoy for July, the yoy rate up from 3.1% in June. Analysts in Portfolio.hu's poll expected 3.3%, and the MNB predicted 3.3% for average CPI-inflation in Q3 in its June inflation report.Note: Yoy changes in percent; Sources: KSH, own estimatesThe big dea...

Industrial growth decelerates in tandem with the Euro Area
HUNGARY · In Brief · 07 Aug 2018

Industrial output fell 1.2% mom on sda basis in June. This marks a slowdown of yoy growth to 3.2%, from 3.7% in the previous month. In terms of quarterly results, output growth decelerated to 3.3% yoy in Q2, from 4.4% in Q1 and 5.9% in Q4 2017.Industrial output growth and PMI Sources: KSH, MLKBT,...

New BMW assembly plant to be beneficial for growth, less so for inflation
HUNGARY · In Brief · 01 Aug 2018

BMW has just announced its intention to build a new assembly plant in Eastern Hungary. The location of this plant will be Debrecen, the country's second largest settlement (203 thousand inhabitants), the expected capacity is 150 thousand cars per year, and the unit would employ over 1000 people w...

CPI-inflation will most likely rise moderately further in July
HUNGARY · In Brief · 30 Jul 2018

The wholesale prices of fuel rose by 0.5% mom in July, following much faster increases - 10.1% in total - over the previous three months. Assuming the same monthly increase by the consumer prices of fuel and the same 0.1% mom increase in non-fuel prices as the one recorded in the same month of la...

A monetary policy measure - by the debt management agency
HUNGARY · In Brief · 25 Jul 2018

ÁKK, the government's debt management agency has just announced a 50 bps increase in the interest it pays on fixed-rate household bonds, i.e. the special kind of HUF-denominated government debt, which is only available for purchase by domestic households. Thus the fixed interest paid on 0.5, 1 an...

The MNB said or did absolutely nothing, appears content with the current position of the forint
HUNGARY · In Brief · 24 Jul 2018

Just as expected, the MNB said or did absolutely nothing new at today's rate-setting meeting, even though the forint is slightly weaker and more volatile than it was before the late-June Monetary Council meeting. So it looks like the MNB is in fact satisfied with the current market situation. The...

Monetary Council tomorrow: no policy change, no important announcement expected
HUNGARY · In Brief · 23 Jul 2018

Analysts by and large uniformly expect no policy change and no important announcement to come out of tomorrow's Monetary Council rate-setting meeting.Even though the forint is somewhat weaker now than it was immediately before the June rate-setting meeting, the heavy depreciation pressure, which ...

The forint is to stay weak on a sustained basis
HUNGARY · Forecast · 18 Jul 2018

The temporarily but substantially depreciating trend of the forint, which started in May, collapsed spontaneously in early July, without the MNB doing anything material to stabilize the currency, except for stopping its usual market interventions against the HUF for several weeks. The key takeawa...

Inflation surpassed the target level in June, as expected
HUNGARY · In Brief · 10 Jul 2018

CPI-inflation rose further to 3.1% yoy in June, from 2.8% yoy in May. This was exactly the number we predicted and also fell in line with market expectation (Portfolio.hu's poll averaged at 3.2%). There was certainly no great magic in making that short-term forecast: the monthly increase in fuel ...

Speculation on the weak forint may be over for now
HUNGARY · In Brief · 05 Jul 2018

With EURHUF falling back below 324 in the last three days, the latest wave of speculation on the weak forint seems to be largely over. It may be time to take stock, draw some lessons and to make some new guesses.First, it seems what ended the last two months' trend of HUF weakness was ended by a ...

MNB vice governor Márton Nagy on television
HUNGARY · In Brief · 02 Jul 2018

The forint slid a bit further today, to a new record of EURHUF 330.7, before returning to around the 330 level, which is 6% down in the year to date. The immediate reason is believed to be the most recent German government crisis, which is most likely to remain a negative factor for the forthcomi...

MNB: No problem, no comment, we have said everything we wanted
HUNGARY · In Brief · 28 Jun 2018

Today's trading did not bring about any relief for the forint, which slid a bit further down, to EURHUF 328.5-329. Responding to a question, the government's spokesman, state secretary Zoltán Kovács said that there may be investor speculation at play against the forint.The MNB apparently did not ...

The forint was never this weak historically
HUNGARY · In Brief · 27 Jun 2018

The EURHUF went to 328.18 at one point in late trading today, which was a historic record in terms of forint weakness. Later it settled down between EURHUF 327.50-328, meaning it failed to recover by any significant amount within the day.All this can be traced back to some euro weakness against t...

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