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Hungary sovereign credit may be upgraded in November 2016
HUNGARY · In Brief · 30 Dec 2015

The top three rating agencies published their revision dates for Hungary's sovereign credit for 2016. Moody's will make its first revision on March 4, followed by July 8 and then by November 4. S&P will look at Hungary on March 18 and September 16, and Fitch Ratings will do so on May 20 and Novem...

Policy-makers show signs of hyperactivity
HUNGARY · In Brief · 19 Dec 2015 · 3 responses

Less than two weeks after a series of MNB comments on what they were going to do to loosen policy soon, by which they managed to talk DOWN the forint moderately, and just days after the December rate-setting meeting of the Monetary Council, at which they took no new measures at all, policy-makers...

Fighting for Growth in 2016
HUNGARY · Report · 18 Dec 2015

Though slightly stronger in Q3, GDP growth’s decelerating trend has also been confirmed. Y/y growth was pulled down by this year’s poor agricultural results; if we exclude those, the slowdown from 2014 is barely noticeable. However, the real story is told by the recent q/q growth rates, which sug...

MNB took no measure today, softened macro forecast only by little
HUNGARY · In Brief · 15 Dec 2015

Today's Monetary Council meeting brought about to no measure at all, whether conventional or unconventional. The base rate remains at 1.35%. In its new inflation report, the Bank left its average inflation forecast for this year unchanged at 0% and revised the 2016 forecast moderately down, to 1....

Inflation moved up from near-zero in November
HUNGARY · In Brief · 08 Dec 2015

The two years long era of zero (or negative) inflation may have been finally over in November, as the yoy rate of CPI-inflation jumped to 0.5% from 0.1% in October and a below-zero level previously. This was one decimal point lower than market (and our) expectation, so essentially no surprise at ...

Conflicting signals from the MNB
HUNGARY · In Brief · 27 Nov 2015

It usually does not look very elegant to return to any story with a markedly different conclusion within a few days' time. But this time around we need to do exactly this. As it happened, just one day after a senior staff member of the MNB (Mr. Virág, executive director) made a rare and specific ...

A rare kind of MNB statement on the forint's exchange rate
HUNGARY · In Brief · 25 Nov 2015

'We need a forint exchange rate, by which the 3% inflation target can be reached on the forecast horizon." This came from a high-ranking staff member of the MNB, Mr. Barnabás Virág, executive director, talking to Reuters earlier today. He added that Hungary's inflationary and growth outlook are b...

General government budget was indeed almost balanced in Q1-Q3
HUNGARY · In Brief · 19 Nov 2015

Earlier this week, we said in our November report that based on cash budget data, the central government budget must have been roughly balanced in ESA2010 terms in January-October, implying much tighter fiscal policy so far this year than required by the 2.4% of GDP annual deficit target. Since t...

The MNB Is Active Again
HUNGARY · Report · 16 Nov 2015

GDP growth fell to 2.2% y/y/sda in Q3, continuing its slide. This means downward convergence to the sluggishness of the Eurozone, and to far below the growth rates of other EU CEE members. GDP growth came in even below market expectations. But we still expect 2.4% growth for full year 2015. A ...

October CPI data: no surprise, firmly on upward trend on excluding-fuel-prices basis
HUNGARY · In Brief · 10 Nov 2015

Believe it or not, we finally scored on a monthly CPI forecast, expecting exactly the actual 0.2% mom, 0.1% yoy for October. The yoy rate was up from September's -0.4%. Fuel prices, which moved around the overall CPI quite erratically in recent months, fell further by 1.7% mom, but in yoy terms t...

Moody's outlook for Ba1 Hungarian sovereign rating went to positive from stable today
HUNGARY · In Brief · 06 Nov 2015

At its last scheduled revision date this year, Moody's improved its outlook for Hungary's Ba1 long-term FX debt rating from stable to positive today. The agency said it expects the government debt ratio to continue its moderate downward trend from 76.2% of GDP at end-2014, with less influence fro...

MNB announced a new program to boost bank lending to SMEs
HUNGARY · In Brief · 03 Nov 2015

Just as expected, the MNB announced today a variety of new policies, with a view to boosting cheap bank lending to SMEs from January 2016. The program, called Growth Supporting Program (GSP) includes HUF 600n (1.7% of GDP) in new, zero-interest refinancing loans to banks, half in HUF, half denomi...

The government is selling its 5% stake in OTP today
HUNGARY · In Brief · 29 Oct 2015

The government is selling its whole 5% ownership stake in OTP through a market auction today, in a step that was not announced previously. The revenue collected was HUF75bn or 0.24% of GDP. Cabinet minister Lázár said this move will not affect the government's target to keep at least 50% of the b...

MNB desterilization proceeds with no impact on interest rates and EURHUF, watch Polish elections on October 25 though
HUNGARY · In Brief · 23 Oct 2015

It has been roughly a month since the MNB's reform of monetary policy tools, and after the latest auctions on October 21, it is time to look at the results so far. Here is a list of what we have found: - The stock placed by banks in 3-month deposits, the new main sterilization instrument, has ris...

Facing the Growth Test in 2016
HUNGARY · Forecast · 20 Oct 2015

GDP growth slowdown, verified by data for Q2 and beyond, will probably persist for the rest of 2015 and 2016, with annual growth at 2.5% this year, just 1.2% in 2016, and a recovery to 2% in 2017, in response to the pick-up of EU transfer distributions from the EU’s 2014-2020 budget. Factors behi...

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