On the macro front, last week was about inflation, emptying coffers, full pockets, stock market records, falling investments. In the days ahead, the Central Statistical Office (KSH) will publish, among other things, tourism and labor market data, while the next credit rating review will arrive on Friday evening, when Moody’s will scrutinize Hungary’s debt rating.
The MNB did not touch interest rates
The Magyar Nemzeti Bank (MNB) left the base interest rate unchanged at 6.5 percent on Wednesday. After the interest rate decision, Barnabás Virág, the vice president of the central bank, said that inflation as a topic continues to concern the participants of the economy.
Inflation has not yet left the public discourse, which indicates that it has not been possible to completely get rid of it, it has not yet reached the central bank’s target value sustainably.
Therefore, the central bank has an additional task in the field of reducing inflation.
The situation is getting worse every day: the government needs HUF 2,400 billion in two months
The state of the state budget at the end of October showed that the VAT deficit could even exceed last year’s thousand billion – the problem with this is that it is the main source of income for the government. As expected, in October the deficit of the central subsystem of the public finances exceeded HUF 3,000 billion, while a year ago at this time it was minus HUF 3,487.6 billion. In one month, we created a deficit of more than HUF 426 billion, the reason for which was the brutal expenditure in October, which exceeded HUF 3,732 billion. Interestingly:
in October, the state spent more on interest expenses (HUF 586.9 billion) than, for example, on retirement benefits (HUF 481.8 billion) or the entire health insurance fund (HUF 357.2 billion).
This is how much more money we bring home, according to KSH data
In September, the gross average earnings were HUF 627,000, while the net average earnings calculated with allowances in mind were HUF 432,000, according to the latest data from the KSH. The gross average earnings were 12.5 percent, the net average earnings 12.3 percent, and the real earnings 9.2 percent higher than a year earlier. The median value of gross earnings reached 519.5 thousand and the median value of net earnings reached 359 thousand forints, which exceeded the level of the same period of the previous year by 15.5 and 15.4 percent, respectively.
Investments are at a low point
Volume of investments 2024 III. quarter, according to the raw data, decreased by 15.4 percent from the same period of the previous year. Compared to the previous quarter – based on seasonally adjusted data – the value of investments decreased by 2.5 percent at comparative prices, announced the KSH. The manufacturing industry, transport, storage and education contributed the most to the decline in investments.
Already one and a half million forints per square meter of new apartments in Budapest
The Hungarian housing market is still highly overpriced, although an average home costs only 11 percent more than what the fundamentals would dictate.
Many people are already buying in advance, because they are afraid of the billions coming to the real estate market next year.
The prices of apartments in Budapest and the rest of the country are increasing at an ever faster rate, according to the housing market report of the Magyar Nemzeti Bank. In the third quarter, an apartment cost 12.8 percent more nationally and 14.7 percent more in Budapest than in the third quarter of 2023.
The interest rate ceiling is available to few people
According to the MNB’s forecast, the average interest rate for an unsubsidized home loan could be 6.5 percent next year. The 5 percent thm (i.e. the interest ceiling) will only be available to a very narrow group,
according to the MNB’s calculations, based on the loans disbursed by the banks this year, only 1.5 percent of the applications meet the criteria.
Based on all housing transactions this year, the percentage of eligible properties does not even reach 1 percent, MNB experts said in response to Economx’s question.
New records on the stock market
The stock index of the Budapest Stock Exchange (BÉT), BUX, increased by 2.29 percent, 1,780.68 points compared to last Friday, and ended the week at a historical high of 79,551.80 points. The total turnover of shares increased from HUF 88.096 billion to HUF 105.7 billion in a weekly comparison, with the exception of Richter, the leading shares strengthened. On Friday, the OTP decided on an exchange rate peak both during the day and at the close. Magyar Telekom closed at an annual high on Friday.
- Magyar Telekom gained the most during the week, by 4.71 percent or HUF 56. Its exchange rate reached HUF 1,244 at Friday’s close, with a weekly turnover of HUF 4.445 billion.
- Compared to last Friday, OTP’s exchange rate increased by 4.48 percent, HUF 940, to HUF 21,940 with a turnover exceeding HUF 84.34 billion.
- Mol increased by 0.83 percent, HUF 22, in a weekly comparison, its exchange rate rose to HUF 2,664, and its total turnover rose to HUF 6.24 billion.
- Richter lost 0.19 percent, or HUF 20, of its value, its exchange rate fell to HUF 10,680, and its total turnover exceeded HUF 8.185 billion.
The weakening has remained, the forint cannot find strength
The forint closed the week above 410 against the euro and 395 against the dollar – both are near two-year lows in the exchange rate.
Dual: TradingView
The forint weakened by 1 percent in one week, and by more than 2 percent in the last 30 days compared to the euro.
A brutal reorganization is coming to the crypto market
Bitcoin has already bitten into the 100,000 mark from the bottom, as the exchange rate of the most significant cryptocurrency was a few hundred dollars away from the psychological level of 100,000 on Friday. According to the crypto expert speaking to Economx, there is still room for growth, but he expects a significant reorganization in the market after the end of the bull market.
What’s up this week?
On the macro front, next week the KSH will publish, among other things, tourism and labor market data:
- On Thursday, the KSH will announce the data on the turnover of commercial accommodation in October. In September, 1.5 million guests spent nearly 3.6 million guest nights in tourist (commercial, private and other) accommodations. The number of guests was 2.0 percent higher than the previous year, and the number of guest nights was 1.1 percent higher.
- The October employment-unemployment statistics will be published on Friday. In September, the average number of employed persons aged 15-74 decreased by 32,000 compared to the same period of the previous year, to 4,699,000. In September 2024, the number of unemployed was 220,000, and the unemployment rate was 4.5 percent.
- The industrial producer price data for October will be published on Friday. In September, industrial producer prices were on average 0.9 percent higher than a year earlier.
- Also on Friday, the KSH publishes the third quarter data on foreign trade in services. In the second quarter, exports of services calculated in euros increased by 5.5 percent and imports by 4.9 percent compared to the same period of the previous year. Assets were 2.9 billion euros, 188 million euros more than a year earlier.
And on Friday evening, another credit rating review will arrive: this time, Moody’s will scrutinize the Hungarian debt rating. In October, S&P already submitted its second revision of this year, and Fitch will “close” this year on the credit rating front on December 6.
On the international scene, it will be worth paying attention to the German IFO economic sentiment index on Monday, the detailed third-quarter US GDP data on Wednesday, and the October German retail sales on Friday.
Source: www.economx.hu
