Services

COUNTRY INSIGHTS

New KSH data reflects the continuation of a genuinely weak economy in September
HUNGARY · In Brief · 08 Nov 2023

KSH has just released four new reports with monthly data. Three of these, the ones on industry, retail sales and housing construction, are quite negative, not at all pointing to any rapid recovery of domestic supply and demand. The fourth one, on guest turnover at hotels, is actually quite positi...

EU Commission's evaluation of Hungary's judicial reform is delayed further by new questions
HUNGARY · In Brief · 04 Nov 2023

Following a letter with questions sent out on September 26, which the government answered on October 19, the EU Commission sent another letter with new questions regarding 'certain elements' of Hungary's judicial reforms on November 1, a Commission spokesman told the Hungarian press the other day...

Disinflation will slow substantially in 2024
HUNGARY · Forecast · 26 Oct 2023

Forecasting the rest of 2023 seems easy. CPI-inflation is safely set to fall well below 10% by December, and the MNB sterilization rate will be most likely reduced at similar speed, while remaining positive in real terms. With a substantially improving current account, this should be sufficient t...

MNB base rate down 75 bps to 12.25% today
HUNGARY · In Brief · 24 Oct 2023

Neither us, expecting 12%, nor the median analyst expectation of 12.5% have proven to be right. The reduction of the monthly pace of the sterilisation rate cut seems to be meant to indicate that: - for the next few months, the yoy inflation rate will still very likely fall following a steep trend...

Analysts lowered rate cut expectations ahead of tomorrow's Monetary Council meeting
HUNGARY · In Brief · 23 Oct 2023

The regular monthly rate-setting meeting is due tomorrow. Following a five-month long series of uniform 100bps cuts, analysts now have a median expectation of only 50bps for the monthly reduction of the sterilisation rate, which is now the base rate. So, the rate would go to 12.5%. This is the re...

Important meeting with the EU Commission is scheduled for this Thursday
HUNGARY · In Brief · 17 Oct 2023 · 1 response

The position of the stars once again does not look highly favourable for the Fidesz government on EU matters. A most recent call by four factions of the European Parliament to remove Olivér Várhelyi, the EU's neighbourhood and enlargement commissioner, a Hungarian diplomat and PM Orbán's nominee ...

A follow-up to yesterday's note: Bulgaria's extra tax on Russian gas shipment is now effective
HUNGARY · In Brief · 15 Oct 2023

Just a brief update on the subject. In yesterday's note, we wrote of Bulgaria's new €10.2/MWh extraordinary tax on the transit of Russian gas shipments to Serbia and Hungary as a draft approved by the Bulgarian parliament in first reading only. Meanwhile, parliament has given its final approval t...

Bad news on gas transit: the pirates of the Turk Stream pipeline
HUNGARY · In Brief · 14 Oct 2023

Sorting out the gas supply problem for the landlocked members of the EU (Austria, Czechia, Hungary and Slovakia) seemed to be relatively easy in theory last year: the solution would be cutting consumption, extending pipelines, importing more LNG to Europe and setting up new re-gasification units ...

Good news on fiscal policy: a small monthly budget surplus in September
HUNGARY · In Brief · 14 Oct 2023

Just as a reminder, the general government's accrual-method deficit, the main fiscal indicator, was 6.8% of GDP in H1, and that figure was derived from an 8.1% of GDP cash deficit of the central government in the same period. Since then, the monthly records of the latter indicator have shown furt...

Year-on-year CPI-inflation sharply down in September, but nothing unexpected
HUNGARY · In Brief · 10 Oct 2023

The yoy headline rate dropped to 12.2%, from 16.4% in August. This was essentially due to a large friendly base effect, as the impact of last summer's energy price reform had just fallen out of the formula. The monthly inflation rate was still 0.4%, so not at all negligible. Core inflation looked...

Continued weak demand and output figures in August
HUNGARY · In Brief · 08 Oct 2023

Retail sales fell by 7.3% yoy in August, after an 8.1% yoy drop in July and an 11% yoy decrease in Q2. In relative terms, this sounds like a bit of improvement, but it is still very far from anything that would directly suggest that the economy was already growing in this period: Note: In volume ...

The fiscal deficit target has been raised: this was always a bridge too far
HUNGARY · In Brief · 03 Oct 2023

This morning, KSH reported a general government deficit ratio of 6.3% of GDP, by EU methodology, for H1 2023. Immediately beforehand, the Finance Ministry announced an increase in this year's annual deficit target to 5.2% of GDP from the previous 3.9%, which was an amended version of the original...

Taking stock: MNB's financial results for H1 2023 look quite bad indeed
HUNGARY · In Brief · 01 Oct 2023

The MNB has come forward with its H1 2023 financial report. It says the MNB had a 6-month loss of HUF999bn, mainly because of very high interest expenditure, paid primarily to domestic banks as the cost of monetary stabilisation. However, its equity stock fell by HUF1767bn in H1, to HUF1512bn or ...

Rising energy prices are affecting the BOP, inflation, central bank policy and growth
HUNGARY · Report · 26 Sep 2023

The renewed rise of oil and gas prices is set to have a moderately negative effect on the BOP, inflation and growth prospects, as well as on central bank policies. No major revision of plans seems to be needed, but the MNB will likely become keener to keep the forint stable in the short term, pos...

Monetary Council next Tuesday, and the ban on grain imports from Ukraine
HUNGARY · In Brief · 22 Sep 2023

This month's rate-setting meeting is set for Tuesday (September 26). The general expectation is another 100bps cut of the O/N deposit rate, to 13%, given that CPI-inflation is predicted to fall below 13% this month, and so one of the MNB's objectives, to reach a positive real interest rate, will ...

Copyright 2024 GlobalSource Partners. All rights reserved.