Slovenia finished February on a surprise high, with news that the economy in the fourth quarter of 2013 expanded by 2.1 per cent year-on-year – the first three months of growth after eight consecutive quarterly declines.
The late upturn, however, proved insufficient to pull the year’s performance into positive territory. Grim data earlier in the year – the first three months was 4.6 per cent down on 2012 – meant the economy in 2013 contracted by 1.1 per cent. Still, that’s a whole lot better than the 2.5 per cent slump in output for 2012. Continue reading »
Only last week, Nomura’s Peter Attard Montalto warned that Hungary’s central bank “appears to be playing with fire” in its insistence that “Hungary is different” and that – with inflation at all time lows – it can continue its rate cutting policy regardless of the bigger world out there.
Montalto published that on Thursday, when the forint had recovered from the worst of the buffeting it received earlier in the week, to trade in a range around Ft308 to the euro. Continue reading »
The markets just aren’t reading the script, it seems. On Thursday the Hungarian economy ministry issued its latest upbeat economic release: “The number of people in work exceeds 4m” – that’s 235,000 more in work than when the Fidesz government took over in 2010, it announced in triumph. Minister Mihaly Varga was equally upbeat in a guest post on beyondbrics this week.
So if Hungary is in such good shape, how come the forint has been so badly hit? Continue reading »
The Hungarian forint set off on a roller coaster ride on Wednesday, buoyed at first by optimism and then buffeted by a sell-off across emerging market currencies, exacerbated by dovish signals from policy makers at home. The forint fell to as much as Ft310 to the euro, its weakest level in more than a year and a drop of 2.1 per cent from Tuesday’s close of Ft303.6. Continue reading »
Mihaly Varga, Hungary’s economy minister, may champion a recent turnaround in his country’s economy and the unorthodox methods he argues have achieved it. But coincident with his guest post on beyondbrics on Monday, the OECD released its latest report on Hungary.
It warns that Hungary will struggle to achieve anything beyond “meagre” economic growth unless it addresses a long list of issues, including the creation of a more predictable tax and business environment, stronger, more effective and even-handed treatment by regulators and competition agencies, and support for the banking sector to lend at commercially competitive rates. Continue reading »
New year, new cut: Hungary’s central bank trimmed its base rate by 15 basis points to 2.85 per cent on Tuesday, a move that surprised analysts only by its size – being the first of its kind after the monetary council turned to 20 basis point cuts in the second half of last year. It brings Hungary’s policy rate to yet another all-time low, down from 7 per cent when the bank starting cutting in August 2012, as inflation stays under control and growth remains a concern. Continue reading »
Viktor Orban, Hungary’s prime minister, along with his Fidesz government, have been remarkably busy this week. They have been talking up a €10bn loan agreement with Russia, signed on Tuesday, to finance two new nuclear reactors, scheduled for completion as early as 2023.
Hungary is about to seal “the best deal for the past 40 years,” with nuclear power the cheapest option for the country, Janos Lazar, Orban’s right hand man in charge of the prime minister’s office told the media on Thursday. Continue reading »
A ruling on Monday by the Kuria, Hungary’s supreme court, that foreign-currency loans issued in the past decade by local banks were legal, triggered a jump in shares of OTP, Hungary’s largest bank, on the Budapest Stock Exchange. The stock – often seen as a proxy for the Hungarian economy – gained more than 5 per cent to Ft 4,420 in the early afternoon, before easing back to close at Ft 4,311, up 2.8 per cent.
Foreign-currency loans, predominantly in Swiss francs, became hugely popular in Hungary between 2001 and 2008 as borrowers rushed to take advantage of much lower interest rates than those on loans taken out in forint, the local currency. Continue reading »
Mol, the Hungarian oil and gas group, has acquired stakes in 14 oil exploration and production units in the North Sea for $375m from Wintershall, a member of the German BASF Group, Mol said on Friday.
The deal, Mol’s first foray into off-shore operations, gives the Budapest-based group a foothold in the well-established region to the north and east of the Scottish coast, with a mix of some wells that are currently producing oil and others of significant future potential. Continue reading »
With a restrained grin, Mihaly Varga, Hungary’s economy minister, pressed the button to open trading at the Budapest Stock Exchange (BSE) on Friday – simultaneously inaugurating the Xetra trading system for the first time in the Hungarian capital. Continue reading »
Hungary has been pumping out the positive spin on economic news for over a year now.
Back then it was surely premature, but with inflation and the base rate at record lows and economic growth finally appearing – some independent analysts forecasting around 1 per cent expansion this year – there is some evidence to support claims of success.
So Tuesday’s news from Transparency International (TI) that Hungary’s ranking in its annual Corruptions Perceptions Index (CPI) is virtually unchanged from last year would appear, if not good news, at least to avoid any further bad headlines about sliding down a slippery slope. After all, the country dropped just one place, to 47 out of 177 countries examined, with 54 points on a scale of 100, also just one less than 2012.
Not so fast, warns Jozsef Peter Martin, TI executive director in Budapest. Continue reading »
While winemakers in a number of western Europe appellations – most particular Bordeaux – are complaining of poor grape harvests this year, vineyards in Hungary’s Tokaj hills – famous for their sweet dessert ‘aszu’ wines – have enjoyed one of the best ever seasons.
Despite an unusually cold September and some light frosts in early October, the remainder of the month, into early November brought clear, cold nights, misty mornings and clear, warm sunny days – ideal conditions for nuturing the so-called “noble rot” needed to turn the grape into an ‘aszu’ berry needed for what Louis XIV of France reputedly declared to be “The Wine of Kings and the King of Wines”. Continue reading »
As expected by the markets, Hungary’s central bank cut the base rate from 3.4 per cent to 3.2 per cent on Tuesday – the sixteenth consecutive monthly cut since the process began in August 2012.
The Hungarian forint depreciated slightly on the news, climbing a fraction to 298.48 to the euro in afternoon trading. Continue reading »
If Hungarian bankers – already facing another year of heavy losses – thought things could not get worse, they just have.
Only days after Karl Sevelda, chief executive of Raiffeisen Bank International, more than hinted he was prepared to withdraw from some central European countries, including Hungary, due to the unfavorable business climate, the competition office in Budapest on Wednesday announced fines on 11 commercial banks totaling Ft 9.5bn (€32m). Continue reading »
Hungary’s central bank once again cut the base rate on Tuesday – for the fifteenth consecutive month – trimming 20 basis points off the previous figure to bring the key rate down to another record low of 3.40 per cent.
That means Hungary has, slice by slice, capitalised on its improving inflation figures and the benign global climate to more than halve the base rate from August last year, when it stood at 7.00 per cent. Continue reading »