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COUNTRY INSIGHTS

The MNB today: an eventful day in Budapest
HUNGARY · In Brief · 19 Jun 2018

Well, this kind of a monetary policy event cannot be seen very often. Expecting that today's Monetary Council will not bring about any significant development in terms of tightening, the forint weakened further this morning, to EURHUF 324-325, just a bit down from yesterday. And then came the Cou...

A bit of a problem with inflation
HUNGARY · Report · 18 Jun 2018

Those analysts who believed a few weeks ago that Fidesz was unlikely to use its two-thirds parliamentary majority to carry out further constitutional reforms appear to have been clearly wrong. In fact, a draft act to further restrict the operation of non-government organizations, and a constituti...

MNB still sees no problem with the weak forint
HUNGARY · In Brief · 14 Jun 2018

Another relaxed comment came from the Monetary Council, this time from Gyula Pleschinger. Speaking today, he saw no reason to change the MNB's existing loose policy, despite the continuation of the forint's slide to EURHUF 322 today. He said the weak forint may temporarily push up CPI-inflation t...

MNB says not at all interested in forint weakening
HUNGARY · In Brief · 11 Jun 2018

Following a similar statement by Finance Minister Varga, MNB vice governor and Monetary Council member Ferenc Gerhardt told InfoRádió on Friday that the forint's recent weakening vis-a-vis the euro is no matter of interest for the MNB. As the MNB has no exchange rate target, it will not tell how ...

Finance minister Varga appeared quite relaxed about the weak forint
HUNGARY · In Brief · 08 Jun 2018

Mr. Mihály Varga, who once again bears the title of finance minister (pretty much a different name for the economy minister only) spoke in a rather relaxed mood about the weak forint today, despite the May jump in CPI-inflation (to 2.8% yoy from 2.3% in April), which obviously had a lot to do wit...

Fuel prices may turn inflation reports upside down in May and June
HUNGARY · In Brief · 06 Jun 2018

CPI-inflation figures for May are due on Friday this week. We used to predict 0.3% mom, 2.4% yoy, the latter up slightly from 2.3% yoy in April. But we do not do so any more, given a 5.3% mom jump by the wholesale prices of motor fuels, recorded in May, which was caused mainly by the strengthenin...

EU transfer allocations for 2021-2027 may be even less than thought initially
HUNGARY · In Brief · 31 May 2018

In our May report, we said that between 2021-2027, Hungary's allocation of EU development transfers may fall to 2.2% of GDP from 2.9% in 2014-2020 and 4.1% in 2007-2013, assuming it will change the same way as the EU's total allocation on its various transfer programs will, according to the EU Co...

Some useful good news on fiscal policy
HUNGARY · In Brief · 27 May 2018

Just as the MNB seems in a little bit of a trap, as the European cycle, EURUSD, EU matters and emerging market assets are moving in the wrong direction, there seem to be two pieces of good news just having come up on domestic fundamentals, and more accurately on fiscal policy.First, the governmen...

Monetary Council meeting: Laissez faire, laissez passer
HUNGARY · In Brief · 22 May 2018

Whatever central bank action the most recent depreciation of the forint vis-a-vis the euro could require, the Monetary Council did or said almost exactly nothing at today's rate-setting meeting. The Council essentially said that both its interest rates and its other tools are just all right as th...

Less EU transfers, more official optimism
HUNGARY · Report · 18 May 2018

The EU Commission’s initial budget proposal for 2021-2027, published in early May, indeed turned out to be rather unfavorable for CEE member states, including Hungary. The EU would spend substantially less on development aid and direct agricultural payments, from which CEE members draw most of th...

Q1 GDP +4.7% yoy: past the peak, but descended just a little bit so far
HUNGARY · In Brief · 15 May 2018

GDP expanded by 4.7% yoy on sda basis in Q1 2018 (the unadjusted number was +4.4%), slightly down from 4.9% yoy in Q4. This will make largely everyone happy, as:- analysts expected +4.2% on average, according to Portfolio.hu, though within a very wide, 3.8-5% range;- the government expects 4.3% g...

Industry has passed its cyclical peak, following the Euro Area
HUNGARY · In Brief · 08 May 2018

New industrial data shows that output growth in the sector, one of the key factors behind last year's 4.2% real GDP growth has passed its cyclical peak already. This morning, KSH reported -0.7% mom, 2% yoy for output growth in March, down from 4.1% yoy in February and 6.6% yoy in January (all on ...

EU budget: What falls by how many percent?
HUNGARY · In Brief · 02 May 2018

The EU Commission's proposal on the 2021-2027 EU budget is now out and official. But it is somewhat difficult to understand, as the EU's own communication is somewhat sketchy and still complicated (a course for them on presentation skills could be useful), and as many journalists are starting to ...

Further bad news on Hungary and the EU
HUNGARY · In Brief · 30 Apr 2018

Over the past week, the following pieces of bad news hit the screens regarding the relations between Hungary and the EU:1. In the middle of last week, the European Parliament's internal affairs committee (LIBE) held a debate of the committee's draft report on the state of affairs in Hungary, on w...

What we feared is starting to become reality
HUNGARY · In Brief · 24 Apr 2018

Well, it is still about a week to go until the EU Commission is coming forward with its 2021-2027 budget proposal, but there is already an increasing number of signals, including official remarks and leaks alike, which are giving away important parts of the story.Most recently, a Financial Times ...

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