Business trends in Hungary – what to expect?

The Hungarian News Agency collected main business and financial news from the previous week. You can read them below.

Q2 C/A DEFICIT REACHES EUR 847M

Hungary had a current-account deficit of 847 million euro in the second quarter, a first reading of quarterly balance of payments data for the period released by the Hungarian central bank showed. Hungary had a 788 million euro deficit in trade of goods but a 650 million surplus in trade of services. The primary income balance was negative 475 million euros, impacted by FDI, while the secondary income balance was negative 234 million euros.

HUNGARY BECOMES HOST STATE FOR RESCEU MEDICAL RESERVE

Hungary became a host state for the rescEU medical equipment reserve, a common European stockpile of protective gear and other medical equipment for emergencies. Host states are responsible for procuring the equipment for the rescEU reserve. The EC finances 100pc of the assets, including storage and transport.

NBH KNOCKS DOWN GDP FORECAST

The NBH expects the economy to contract between 5.1 percent and 6.8 percent this year, forecasts from its fresh quarterly Inflation Report showed. Average annual inflation is set to reach 3.5-3.6 percent, still within the +/- one-percentage-point tolerance band around the 3.0 percent mid-term inflation target. The NBH estimated that supply-demand distortions had lifted headline CPI by 0.9 percentage point during the summer months.

STATE AUDIT OFFICE HEAD SUGGESTS TIME RIGHT FOR PIT CUT

Laszlo Domokos, the head of the State Audit Office (ASZ), suggested circumstances justify a reduction in the personal income tax rate, speaking at conference of economists. He said a one-percentage-point reduction in the PIT rate would produce a 150 billion forint (EUR 412.6m) impact, while a three-percentage-point cut would have an annual impact of 500 billion over two years.

TRANSPORT SECTOR PERFORMANCE PLUNGES IN Q2 ON PANDEMIC IMPACT

Performance of Hungary’s transport sector dropped in the double-digits in the second quarter from the same period a year earlier, suffering the impact of the coronavirus crisis, data compiled by the Central Statistics Office (KSH) showed. Performance of freight transport fell by 22 percent to 11.9 billion freight-kilometres. Performance of domestic freight transport fell by 10 percent to 4.0 billion freight-kilometres, while performance of international freight transport dropped by 26 percent to 7.9 billion freight-kilometres.

Source: MTI