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Q2 GDP data met expectations, exceptionally
HUNGARY · In Brief · 30 Jul 2025

As we reported yesterday, all forecasters expected GDP growth to be slightly positive in Q2, after being similarly negative in Q1. And they have proven to be right. In fact, real GDP growth reached +0.4% qoq, +0.2% yoy, the former after a revised -0.1% qoq in the first quarter. This also means th...

Tariffs, secondary tariffs and Q2 GDP
HUNGARY · In Brief · 29 Jul 2025

The preliminary Q2 GDP data is due tomorrow. Following -0.2% qoq, -0.4% yoy in Q1, Portfolio.hu's analyst poll shows a median forecast of 0.2% qoq, 0% yoy for Q2, with 0.7% average growth for this year and 2.7% growth for 2026. A short while ago, our quarterly forecast update included a slightly ...

Interest rates, assessment all kept unchanged at today's Monetary Council
HUNGARY · In Brief · 22 Jul 2025

The regular monthly rate-setting meeting of the Monetary Council was held this morning. Nobody expected any change, and there was none either, except a reduction of the mandatory reserve ratio for banks, from 10% to 8%, starting from August 1. Why is the latter essentially unimportant? Because th...

Mr. Trump has launched a new threat to Hungary’s economic growth
HUNGARY · Forecast · 21 Jul 2025

External conditions have not made macro forecasting any easier over the past three months. We see two key sources of high volatility and uncertainty that complicate the life of the macro analyst. One of them is geopolitical news, as demonstrated by the most recent violent episode between Israel, ...

The elephant has entered the china shop
HUNGARY · In Brief · 13 Jul 2025

As his self-imposed 90-day deadline for trade talks had been passed, Mr. Trump sent out a number of letters in the past few days. Mme von der Leyen also received one, from which she learnt that the US government intended to impose a 30% general tariff on all of the EUs merchandise exports sold in...

Headline inflation up temporarily on fuel prices, core inflation markedly down in June
HUNGARY · In Brief · 08 Jul 2025

The headline rate of CPI-inflation in June has been reported this morning at 0.1% mom, 4.6% yoy, the latter up from 4.4% yoy in May. This uptick was entirely due to fuel prices, which rose by 0.5% mom. Here the point is that fuel prices actually fell by 3.4% mom in June 2024, and the difference b...

Industrial output in May: from decrease to stagnation
HUNGARY · In Brief · 06 Jul 2025

The preliminary industrial output numbers for May were not particularly strong, to say the least: -1.3% mom, -2.6% yoy. Yet, it is notable that this came after a much stronger result in April, when output actually grew by +1.5% mom, so that in the last two months together, output did not fall any...

Budapest Pride march took place without problems on June 28
HUNGARY · In Brief · 29 Jun 2025 · 1 response

On Saturday, June 28, the annual Pride March of the LGBTQ community took place in Budapest, despite the government's express will and a previously announced police ban on the event. The march attracted between 50-100k participants, making the event the biggest Pride ever, and the second largest s...

No change in the base rate today - the MNB has become more pessimistic about the inflation outlook
HUNGARY · In Brief · 24 Jun 2025

Today, the Monetary Council left the base rate unchanged at 6.5% and the interest rate corridor also an unchanged +/-1%-point around the base rate. After the meeting, governor Varga spoke about the main points of the Q2 inflation report, which is set to be presented in detail on Thursday this wee...

The MNB’s tight policy course is vindicated—once again
HUNGARY · Report · 23 Jun 2025

In the past few weeks, this is the second time we are giving this title to a piece of research. The first occasion was when the May inflation data came out with an unexpected rise in the headline rate. But we are coming back to this same conclusion again, after all that has happened, and in view ...

No base rate change is likely at Tuesday's Monetary Council meeting
HUNGARY · In Brief · 22 Jun 2025

The Council is set to hold its regular monthly rate-setting meeting on Tuesday, June 24. So far this year. all decisions, and indeed all votes within the Council, were for holding the base rate at 6.5%. Last time, on May 27, the Council concluded that neither domestic inflation, nor external cond...

May CPI data out, MNB's tight policy course vindicated
HUNGARY · In Brief · 11 Jun 2025

The headline rate of CPI-inflation surprised on the upside in May. Against 4.2% yoy expected by analysts (their median forecast), the actual number was 4.4% yoy, with 0.2% inflation in May alone. The yoy rate rose from 4.2% yoy in April. Non-fuel inflation backed up to 5.2% yoy from the previous ...

May inflation data due tomorrow, and some fiscal data reported
HUNGARY · In Brief · 10 Jun 2025

For headline CPI-inflation, analysts in Portfolio.hu's monthly poll expect 4.2% yoy, unchanged from April, as regards the median forecast recorded by the survey. For end-2025, the headline rate is expected to decrease to 3.9% yoy. We fully agree with this forecast for May, and also with the expec...

Fitch affirmed their BBB/Stable sovereign debt rating on Friday
HUNGARY · In Brief · 08 Jun 2025

Just one week after the latest review by a Top-3 rating agency, Fitch Ratings affirmed their BBB/Stable mark on Hungary on June 6. The report was quite negative in the sense that it identified three key areas where the agency saw deterioration since their previous review: growth outlook, short-te...

Relatively good industry and retail sales data for April
HUNGARY · In Brief · 06 Jun 2025

At last, we see a month in which both industrial output and retail sales grew materially, in month-on-month volume terms, on seasonally and day-adjusted basis. As for industry, output was up 1.5% mom. Year on year, this still meant a decrease of 2.6%, but even that was way better than the -6% yoy...

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