HungaryTrends – The week in business and finance

See below main business and financial news from the previous week:

LABOUR SHORTAGE CRITICAL IN HUNGARY

Hungarian economy is struggling hard with labour shortage. The reason is simple: people go West for higher wages and better working conditions. The most affected sectors are public transport and service, tourism and IT. A solution could be wage union initiated by opposition party Jobbik, but government does not support it.

NUMBER OF RESTAURANTS DWINDLING, REMAINING DOING WELL

Many entrepreneurs are attracted to the idea of opening a restaurant in Budapest, but many soon end up closing their doors, according to company data service Opten. Whereas the number of establishments has continually fallen in the past three years, remaining businesses are doing well, however.

A NEW, MODERN QUARTER TO BE ADDED TO BUDAPEST’S CITYSCAPE

The Gránit Pólus Group plans on executing a development in the most valuable and frequented area of Budapest. It will be the biggest private estate development in the upcoming years. Offices, commercial units, apartments and hotels will be built in the new city quarter.

NBH TO USE UNCONVENTIONAL TOOLS TO FLATTEN YIELD CURVE

The National Bank of Hungary (NBH) said it will introduce unconditional interest rate swap facilities and a mortgage bond purchase programme in January. The central bank aims to flatten the yield curve with the unconventional monetary policy tools.

GOVERNMENT STANDS BY GDP FORECAST

Hungary’s government is standing by its target for GDP growth of over 4 percent this year, Economy Minister Mihaly Varga said at his annual hearing in Parliament’s budget committee. Varga said he expected the Central Statistical Office (KSH) to revise upward growth figures from previous quarters. He noted that KSH had revised the GDP growth figure for 2014 from 3.5 percent to 4.2 percent. The government’s official target for GDP growth this year is 4.1 percent, but Q1-Q3 growth came in at just 3.7 percent.

HUNGARY WAGES CLIMB 13.6 PC IN SEPTEMBER

The average gross wage in Hungary rose by 13.6 percent annually to 292,944 forints (EUR 939) in September, KSH said.

Wages have been boosted by the higher minimum wage as well as pay increases for social services and healthcare workers.

HUNGARY JOINS CHINA-CEE FUND WITH EUR 50 M CONTRIBUTION

Hungary’s government has decided to join the China-Central and Eastern Europe Investment Cooperation Fund, a private equity fund organised by the Export-Import Bank of China, with a 50 million euro contribution.

K+H BANK Q1-Q3 NET INCOME FALLS ON HIGH BASE

Net income of Belgian-owned K+H Bank fell by an annual 4 percent to 32.2 billion forints (EUR 102m) in the first three quarters, because of revenue from the sale of a stake in VISA in the base period, the lender said. Excluding the impact of the sale, net income was up a little more than 8 percent.

INVESTMENT FUND ASSETS CLIMB OVER EUR 20.2bn

Net asset value of investment funds in Hungary rose by 7.2 percent to 6,303.2 billion forints (EUR 20.2bn) in the twelve months to the end of September, fresh data published by the NBH showed. Assets in real estate investment funds jumped by 41 percent to 1,097.7 billion forints.

AKK RAISES OFFER AT BOND AUCTION ON STRONG DEMAND

The Government Debt Management Agency (AKK) sold a combined 82.5 billion forints (EUR 264m) of bonds at an auction, raising its original offer by 27.5 billion forints on strong demand. Yields for the longer terms fell just days after NBH policy makers announced the introduction, from next January, of unconditional interest rate swap facilities and a mortgage bond purchase programme that aim to flatten the yield curve.

MKB INSURANCE ACQUISITION LIFTS CIG PANNONIA REVENUE

Consolidated revenue from premiums of Hungarian insurer CIG Pannonia rose by an annual 41 percent to 18.6 billion forints (EUR 59.6m) in the first three quarters, lifted by the acquisition of MKB Insurance late last year, an earnings report showed. Operating costs were up 74 percent at 7.0 billion forints.

FIRST HOME BUILDING SOCIETY IN HUNGARY REGISTERED

The NBH accepted the first application for registration by a home building society in Hungary. Members who save enough to make a 20 percent down payment on a new home are selected either through a bidding process, based on the size of their contributions, or through a lottery, if contributions match, to get an interest-free home loan.

WINDOW MAKER MARSHALL ABLAKGYÁR SETS UP HUF 1.2BN PRODUCTION BASE

Hungarian window maker Marshall Ablakgyár completed a 1.2 billion forint (EUR 3.85m) production base in Eger (NE Hungary). The company won a 440 million forint European Union grant for the brownfield investment, which will create 27 jobs.

Source: MTI/Daily News Hungary