Business

Hungary launches EUR 1 billion credit scheme to boost exports and foreign investments

The government on Wednesday announced the launch of a close to HUF 400bn (EUR 1 billion) credit scheme to support exports and outward FDI.

Richárd Szabados, the state secretary for SMEs, said the scheme was an element of the Demján Sándor Programme which aims to scale up SMEs and boost GDP growth over 3pc. The HUF 1,400bn Demján Sándor Programme includes credit, grant and capital financing elements as well as measures to reduce administrative burdens.

Kornél Kisgergely, the chairman-CEO of Magyar Eximbank, said the lender would play a strategic role in implementing the Demján Sándor Programme. Applications for the new credit will be accepted from January 6, 2025, he added. Some HUF 350bn in credit will be available for outward FDI. Borrowers must take out at least HUF 2bn in the construction.

Credit for investments to boost exports will include HUF 50bn for leasing. Bence Katona, who heads National Capital Holding, said HUF 60bn would be available to finance outward FDI in the framework of a capital investment programme. Transactions are expected to range from USD 1m to USD 25m, he added. National Capital Holding owns a USD 165m private equity fund for outward FDI that is managed by Focus Ventures, he said. The fund targets investments in Europe and Asia, especially ones in Central Asia, he added.

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Hungarian Development Bank launches EUR 84 million EU-funded credit scheme for SME digitalisation

December 11, 2024

Taxi company fined for misleading ads in Hungary

Hungary’s Competition Office (GVH) has fined taxi company City Taxi HUF 2m for misleading advertising, the watchdog said on Tuesday.

City Taxi fined

City Taxi said it was “Hungarian”, suggesting that it was the only such company in Budapest, and touted a “price guarantee”, when taxi fares in the capital are regulated, GVH said.

GVH noted that City Taxi had ceased the unlawful communication voluntarily when the probe was launched.

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December 10, 2024

Hungarian oil and gas company MOL and University of Pannonia wind up R+D project

Hungary’s MOL and the University of Pannonia have successfully completed a research and development project and signed a cooperation agreement extending their partnership for another three years, the oil and gas company said on Monday.

MOL and University of Pannonia project completed

The R+D project, launched in March 2020, focused on renewable energy, waste management, water technologies, sustainable tourism and sustainable urban development. It produced a sustainable reactor system for thermal waste management processes and equipment for the treatment of oily waste water.

The renewed partnership between MOL and the University of Pannonia will target chemical recycling technologies for selective waste, plastics and tyres and the development of sustainable fuels, including sustainable aviation fuel.

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December 10, 2024

Átlátszó: Sanctioned Belarusian businessman has been involved in shady deals in Hungary

A Belarusian businessman, Viktor Chevtsov, previously accused of financial crimes and closely tied to the Lukashenko regime, was found to have registered a company in Hungary despite being under EU sanctions. His company, PS Commodities Ltd., reported hundreds of millions of forints in revenue over several years without visible activity, leading to its closure by Hungarian authorities this year.

Suspicious business operations in Hungary

In August, the Belarusian Investigative Center (BIC) informed Hungarian investigative portal Átlátszó about Chevtsov’s potential business operations in Hungary. Subsequent investigations confirmed that PS Commodities Ltd., registered in 2019, operated without clear activities yet reported substantial revenues, including HUF 346.57 million (EUR 842,100) last year. The company’s headquarters was listed at a Budapest apartment, raising questions about its legitimacy.

The National Tax and Customs Administration (NAV) suspended PS Commodities after determining its owner was subject to sanctions for undermining Ukraine’s sovereignty and territorial integrity.

Links to residency bond scandals

Chevtsov’s company is also connected to a Hungarian woman, Krisztina Simon, who was involved with the VolDan Investments firm, previously active in Hungary’s controversial residency bond program linked to Minister Antal Rogán, Átlátszó wrote. The program facilitated EU residency for foreign investors, often criticised for its lack of transparency.

Simon’s association with Chevtsov highlights further concerns, as her listed address overlaps with one registered by the Belarusian businessman. VolDan Investments, connected to Rogán’s associate Shabtai Michaeli, had faced allegations of financial misconduct.

Chevtsov’s dubious history

Chevtsov, known for his ties to the Lukashenko regime, managed financial operations in Belarus during the 1990s, including positions in Infobank, later accused of laundering profits from illegal arms trade. The U.S. Department of Justice also implicated Infobank in laundering funds for Saddam Hussein’s regime.

In recent years, Chevtsov became a major shareholder in a Belarusian company that monopolised hologram production under the Lukashenko government. This enterprise played a role in supporting Ukraine-related aggression, prompting EU sanctions.

Fictitious business activities

PS Commodities claimed involvement in diverse industries, including fruit trade, chemicals, and MOL lubricants. However, MOL denied any connection. Despite PS Commodities’ claimed global operations, the company had no visible workforce or physical office.

This case marks the first known instance of an EU-sanctioned individual facing asset-related action in Hungary. It underscores concerns over Hungary’s vulnerabilities to questionable financial activities, particularly by individuals tied to controversial regimes. The involvement of entities linked to Hungary’s residency bond programme adds another layer of scrutiny to a scheme already fraught with allegations of misconduct.

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Featured image: depositphotos.com

December 10, 2024

Hungarian state launches half a billion euro capital programme to support housing

National Economy Minister Márton Nagy announced the launch of a HUF 200bn (EUR 500m) capital program in March to support the construction of dormitories, rental flats, and homes at a press conference on Monday.

Nagy said the scheme’s announcement preceded intensive consultations with property market developers. Participation is open to all funds, open—or closed-end, existing or newly established, until the end of 2025, he added.

The state-owned Hungarian Development Bank (MFB) will invest in the funds only at EUR 73m (HUF 30bn) per fund, and its stake in each fund will be capped at 70pc.

Nagy said the HUF 200bn of capital would give the home market a “big boost” and contribute to GDP growth.

He noted that home sales had climbed by around 40 percent last year, but just 15 percent of home loans were used to buy new homes.

Nagy said the scheme’s timing was intended to bolster the supply side ahead of a large volume of maturing inflation-linked retail government securities in the spring.

He added that the goal was to increase the number of new homes constructed to 25,000 annually, up from around 12,000 in 2024.

Shocking: Renting in Hungary’s cities leaves workers empty-handed!

National economy minister meets with business assoc heads

National Economy Minister Márton Nagy met with the heads of business association VOSZ at his office on Monday.

VOSZ president János Eppel and chief secretary László Perlusz discussed proposals to activate Hungary’s labour market reserve with Nagy, his ministry said.

Nagy said local businesses, especially SMEs, needed to become more efficient and boost productivity to preserve the country’s competitiveness and keep up with wage increases.

He asked the VOSZ leaders to participate in the implementation of the Demján Sandor Programme, a government scheme to scale up SMEs.

Demján Sándor Capital Programme to launch with HUF 100bn in February

The Demján Sándor Capital Programme, an element of the Demján Sandor Programme for scaling up local SMEs, will launch with an allocation of HUF 100bn in February, the state secretary for SMEs announced last week.

Richárd Szabados said the programme will provide capital financing to SMEs for expanding their range of business partners and joining new supply chains.

The 8+1 point Demjan Sandor Programme is a part of the government’s New Economic Policy Action Plan.

Szabados said the Demján Sandor Capital Programme was drafted with the participation of National Capital Holding and would be implemented with the support of the Hungarian Chamber of Commerce and Industry (MKIK).

The details of three more elements of the Demjan Sandor Programme will be announced in the coming two weeks, he added.

National Capital Holding CEO Bence Katona said companies could apply for HUF 100m-200m in the framework of the Demján Sandor Capital Programme. The Hungarian Development Bank (MFB) will subscribe to the investment fund units in the scheme, and MKIK will manage the investment fund, he added.

The scheme will not focus on any particular branch of industry, but areas designated in the government’s policy action plan, such as green economy, digitalisation, healthcare, education and sustainable industry, will enjoy an advantage, he said. Purchases of real estate will be excluded from the scheme, but the capital may be used to upgrade or expand property already in use, he added.

The deadline for completing investment projects included in the scheme will be one year, with an option for a six-month extension if justified by the circumstances, he said. He added that the capital could be used for the self-financing requirement for other credit, paving the way for companies to access up to several hundred million forints.

The rate on the state-subsidised capital financing is 5pc. To comply with legal requirements, companies will exchange a token, 1pc equity stake for the financing that carries no right of control and may be repurchased at any time.

Companies with average annual revenue of at least HUF 300m and with at least two people on payroll may apply for the financing.

December 9, 2024

Orbán cabinet: Budapest ‘can’t get out of paying taxes’

The Budapest municipality is going against the Constitutional Court’s decision, which in October rejected Budapest’s proposal that the solidarity tax the municipality was called on to pay to support poorer localities was unconstitutional, a state secretary of the finance ministry said on Monday.

State secretary András Tállai said that this year, 848 “wealthier” localities paid a solidarity contribution to aid 1,250 localities in performing their tasks. “It is peculiar that it is the richest city of the country, the capital, that finds supporting poorer localities difficult,” Tallai said.

Tallai said government support for local authorities will increase to 1,266 billion forints (EUR 3bn) from 1,050 billion this year, and additional funds will flow into wage costs.

In reaction to Karácsony’s statement that the city would not pay some 50 billion forints in solidarity contribution, Tállai said,

“Everyone has to comply with the law.”

Last week, Budapest Mayor Gergely Karácsony said that in a bid “to retain the municipality’s self-determination and resources,” the city’s budget had been drafted on the assumption that

“Budapest will pay as much solidarity tax to the central budget as it receives from central coffers to finance its services.”

UPDATE

Karácsony: Budapest’s real problem is ‘no money’

Gergely Karácsony, the mayor of Budapest, told a conference on Monday that the capital’s “real problem” was that the municipality had “no money”.

Karácsony said at the Republikon Institute gathering that it was not especially the political gridlock in the assembly or the fact it had been impossible to appoint a deputy mayor that was holding the city back, but rather that it was in the midst of an economic crisis and had fallen victim to a government policy of blackmail.

He said the city assembly was a battleground between its biggest factions, Fidesz and the Tisza Party, both of which exploited Budapest affairs to position themselves ahead of the 2026 general election.

Recent months had shown that

“Fidesz votes no to everything”, so decisions can only be made with the ten-member Tisza faction.

Karácsony said it would be hard to overcome the gridlock if local politicians focused solely on the city’s affairs as even then “the lightning of national politics strikes above us”.

Budapest Mayor Karácsony urges Orbán to address housing crisis as rent prices soar

December 9, 2024

BREAKING NEWS! Mega real-estate deal planned at Budapest’s largest railway stations, says Vitézy

Dávid Vitézy, the leader of the Podmaniczky Movement in the city assembly, has said a mega real estate deal is being planned in which the landholdings of Budapest’s four major train stations would be leased out for 99 years and developers would be able to commercialise the stations and their surroundings “for free.”

Speaking at a press conference on Monday at Nyugati Square, Vitézy said construction and transport minister János Lázár had opened the deal allowing national railway company MÁV to lease out the properties. He said the seven-page tender issued would close at the end of January. As we wrote earlier, Outrage erupts as Hungarian minister Lázár crosses the line with offensive remarks: Vitézy is an ‘aberrant, liberal kids, bootlicker’

Vitézy said MÁV had shown him the draft contract which included neither a purchase price nor a rental fee. Moreover, it did not prescribe any developments for prospective investors, he said.

He said Lázár’s ministry had claimed that the tenders only concerned the renovation of the station buildings, which he called “misleading”, as the tenders also would allow private companies access to areas of 15-30 hectares surrounding the stations, he added.

He said the tenders failed to include where and what the applicants should develop “in these vast areas” and had not been preceded by any consultation with either the districts or the capital.

He said that selling Budapest’s brownfield sites to investors “based on a seven-page shopping list” was typical of “the most corrupt countries in the developing world.”

Vitézy ended his Facebook post with this:

“Even in Africa or Latin America, such a unilateral tender, which would leave the state, the railways and passengers at the mercy of private interests for 99 years, would be a surprise.

There is indeed enormous development potential lying dormant in these areas of Budapest, with missing institutional and residential developments in disused railway areas, new parks, even a new Budapest congress centre behind the Nyugati, and the ideal location for the new Buda super-hospital near Kelenföld. Once the tunnel is built in the future, the South site will offer enormous urban development potential.

However, the successful development of a key area for a city region of three million people and the major railway stations serving the city can only be driven by the public interest. Turning off the public interest, driven solely by profit interests, will not bring a good end to urban development on this scale. We might have hoped that Hungary had learnt this lesson after the turbulent transition of regime change. János Lázár’s current move shows once again that he has learnt something quite different from the muddled period that followed the change of regime, and he not only wants to bring it back, but also wants to change the scale.”

The entire press conference here (in Hungarian):

Railway stations in major Hungarian cities to be completely rebuilt with private capital

December 9, 2024

Hungarian government achieves fiscal balance stabilization this year

The Finance Ministry released preliminary data on Monday showing that Hungary’s cash flow-based general government deficit reached EUR 8bn (HUF 3,284.3bn) at the end of November.

At the end of the month, the central budget had a deficit of HUF 3,257.5bn, the social security funds were EUR 0.55bn(HUF 226.8bn) in the red, and separate state funds were HUF 200.0bn in the black.

Alone in November, the general government deficit came to HUF 233.8bn.

“The government has stabilised the fiscal balance this year while closely following the development of the deficit,” the ministry said. “The government remains committed to improving balance indicators while putting the economy on the sustainable growth path,” it added.

The ministry said interest expenditures reached HUF 3,412.7bn in January-November, climbing by HUF 798.1bn from the base period. It noted that the fall in forint interest rates started in 2023 was delayed in showing up in cash flow-based interest expenditures.

It added that accrual-based interest expenditures will decline substantially in 2025.

The ministry reaffirmed the government’s commitment to reducing the general government deficit to 4.5 percent in 2024, 3.7 percent in 2025, and under 3 percent in 2026.

Weak car and battery factories, big drought: the Hungarian economy in technical recession

December 9, 2024

EU Presidency: Hungarian Agriculture Minister points to importance of farmer-friendly policy after 2027

Agriculture Minister István Nagy highlighted the importance of a farmer-focused, farmer-friendly common agricultural policy in the period after 2027 ahead of a meeting of his European Union peers in Brussels on Monday.

Nagy, who is chairing the Agriculture and Fisheries Council as Hungary holds the rotating presidency of the Council of the EU, said the text approved by the Council acknowledged the need to boost farming productivity, while ensuring living standards for farmers, stabilising markets and guaranteeing affordable prices for consumers.

He said a discussion of fishing opportunities in the Mediterranean and Black Seas would takes place at the meeting, adding that quotas established on the basis of scientific results were “extraordinarily low”.

Reports will also be delivered on a forest monitoring framework, biomass-based development and the BIOEAST initiative for cooperation on food security and agricultural sustainability in Central and Eastern Europe, he said. The ministers will also hear the results of a European apiculture sector conference, he added.

The two-day Agriculture and Fisheries Council meeting will be the last during Hungary’s EU presidency.

Budapest’s housing crisis in focus: What about the worsening situation in Debrecen?

As Hungary’s housing crisis dominates the headlines, the focus remains firmly on Budapest, where rental costs consume up to 60% of monthly incomes. However, the overlooked city of Debrecen faces its affordability struggles, with a house price-to-income ratio consistently worse than the capital’s for much of the past decade.

Everyone focuses on Budapest

As G7 writes, the housing crisis in Budapest has reached critical levels, with rental costs consuming 50–60% of monthly incomes, according to Hungary’s Ministry of National Economy. Responding to Airbnb’s call to protect hosts’ rights, the Ministry of National Economy attributed surging property and rental prices partly to Airbnb-driven investments.

budapest property real estate housing residential area university apartment hotel inflation — Budapest, Hungary. Source: depositphotos.com

To tackle affordability, the government unveiled plans to ban new short-term rentals in Budapest for two years starting in 2025, quadruple flat taxes on private accommodations, regulate rental fees, and revive the stalled Budapest Diákváros dormitory project. Critics argue the government’s sudden focus is politically motivated, with elections looming in 2026, and point to its prior neglect of the housing crisis. Meanwhile, opposition leaders, including Gergely Karácsony, face accusations of failing to fulfil earlier housing promises, adding to the contentious debate.

Debrecen remains overlooked

The Hungarian National Bank’s latest report on the housing market challenges the government’s focus on Budapest’s housing crisis, revealing nuanced data on affordability across Hungary. While Budapest has seen significant price increases in recent years, affordability has improved since 2021, with the capital’s housing market faring better than several European cities like Berlin and Sofia. Interestingly, Debrecen, often overlooked in government narratives, has a house price-to-income ratio that has consistently been worse than Budapest’s for much of the past decade. Additionally, while rents remain a concern in Budapest, the affordability of rental properties compares favourably internationally. This highlights the complexity of housing challenges across Hungary and raises questions about the government’s selective prioritisation of affordability issues.

Mind-blowing increases in 2025

Housing affordability in Hungary, including in Debrecen, faces potential challenges by 2025, with experts predicting property price increases of up to 20%, outpacing projected wage growth of 7–8%. This trend, highlighted by Habitat, underscores the need for systemic solutions rather than short-term fixes. The NGO advocates for targeted support measures, such as rent subsidies, municipal housing, and strengthening social rental systems, to address the disparity between rising housing costs and slower income growth. Without sustainable reforms, affordability issues will likely persist, affecting cities like Debrecen as much as Budapest.

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Featured image: depositphotos.com

December 9, 2024

Another unstaffed 24/7 smart shop may open in 2025 in Szeged

Szeged may see Hungary’s second unstaffed 24/7 smart shop in 2025 if Coop can carry out its plans, János Kelemen, the CEO and President of the company, told Délmagyar. The first unstaffed Hungarian grocery store opened at the Fény utca market and is run by the Hungarian Charity Service of the Order of Malta. Therefore, it does not generate a profit. Consequently, the Szeged grocery store can become Hungary’s first profitable unstaffed shop.

Unstaffed 24/7 smart shop may open in 2025

According to Telex, the Coop unit in Szeged’s Szent István Square can become Hungary’s second unstaffed grocery store, which may be ready in 2025. The store has been revamped, and after its reopening, customers noticed that traditional cashier’s desks have been removed to give space for self-service desks. For now, those are staffed so customers can pay there just like they usually do. However, that may change soon.

János Kelemen, the CEO and President of Coop said that they would like to open the first unstaffed Coop unit by early 2025 in Szeged. Sharing more details on the issue would be unresponsible, he added.

Telex wrote that the unstaffed Coop grocery stores could be open 24/7, but the company did not share any information concerning the exact technology they would operate.

In the Czech Republic, the first unstaffed Coop units were opened in 2022. Customers can shop there with a face-recognising app and cannot pay with cash. However, the system allows you to shop even on Sunday night or early morning on Friday since they are always open.

Lukáš Němčík said that 24/7 unstaffed grocery stores are especially popular in rural areas because they allow locals to purchase the essentials without driving to a supermarket. In case of emergency, customers can call the remote security officer.

Another unstaffed smart store in Budapest

According to an RTL Klub report, Hungary’s first unstaffed grocery shop opened at Budapest’s Fény utca market. The operator is the Hungarian Charity Service of the Order of Malta, and they sell the products of the charity service employees who work in the poorest Hungarian villages.

The charity service does not regard their grocery store as a business branch. Instead, they believe it is helping poorer families and buyers as well. Tamás Romhányi, the communications director of the charity, said their Fény utca market store does not generate profit.

Another unstaffed 24-7 smart shop may open in 2025 in Szeged — The first unstaffed shop in Hungary. Photo: PrtScr/RTL Klub

This shop is still one-of-a-kind in Hungary, and its operation teaches lessons to everybody planning to copy the initiative. The shop sells various products, from handmade cheese to syrups. You can shop there with the help of an app. If you take a product from the shelf, the system automatically adds it to your basket. If you put it down, the product will be deleted. You can pay with your phone or debit card.

Here are some more photos of the Budapest shop:

The charity service plans to open such stores in poorer and smaller villages in rural Hungary, where people can buy essentials locally.

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December 8, 2024

BMW’s Hungarian plant in Debrecen just lost a high-volume model in a strategic change!

The German car manufacturer BMW has decided that one of the three models originally planned to be produced in Debrecen, the new 3 Series based on the Neue Klasse platform, will be built at the main plant in Munich instead of in Hungary. This decision may have an impact not only on production capacity but also on the plant’s economic contribution, particularly in terms of Hungary’s GDP.

The Debrecen BMW plant was originally designed to produce three different electric models from the Neue Klasse platform: the iX3, iX4 and 3 Series. However, as part of the restructuring decision, BMW management decided to build the new 3 Series in Munich instead. According to 24.hu, the reason for this change is the uncertainty in the industrial environment, which is affecting the European car industry in particular.

The decision allows the Debrecen plant to focus on the two remaining models, the iX3 and iX4. However, this means that the plant will be optimised to produce only two models instead of the three originally planned.

Reduction in capacity

When the construction of the plant was announced in 2018, BMW set out ambitious plans to produce 150,000 cars a year in Debrecen. However, it now appears that this figure could be significantly reduced. According to industry sources, the maximum capacity of the plant could be limited to 80-90 thousand cars per year based on current plans.

The capacity reduction is due to the relocation of the new 3 Series to Munich. This model is expected to be a high-volume product and will be produced at the company’s flagship plant in Munich. Full capacity utilisation of the Debrecen plant will therefore remain uncertain towards the end of the decade.

The production start date has also been changed. The original target date of 2025 has been postponed by one year, and production is now expected to start in 2026. This shift is also due to the general uncertainty in the automotive industry.

The uptake of electric cars in Europe has been slower than manufacturers had previously expected. This slowdown has created spare capacity for several multinational carmakers, providing an opportunity to restructure and optimise production plans.

The strategic role of the Munich Plant

Munich continues to play a key role in BMW’s global manufacturing strategy. The company chose to build the new 3 Series at this central plant because of its ability to manage the product portfolio accurately and efficiently. This decision is in line with the company’s priority of strategically positioning its highest-volume models.

Munich is also a good location because in the current economic climate, competition between production sites is fiercer than ever. It is becoming increasingly difficult for automotive companies to make long-term plans, especially for new models and plants.

BMW’s possible impact on the Hungarian economy

The planned reduction in production at the Debrecen plant could have a direct impact on Hungary’s economic growth. The plant was originally expected to make a significant contribution to Hungary’s GDP but reduced capacity and delays in the start of production may reduce this expectation.

However, the plant could still be an important player in the Hungarian car industry, particularly with the production of two new electric models. The key question for the long-term outlook, however, is whether the plant will be able to reach full capacity and what new models are planned for the future.

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December 8, 2024

PM Orbán’s friend, the wealthiest Hungarian, Lőrinc Mészáros, may buy top Austrian football club

Lőrinc Mészáros, the wealthiest Hungarian

Lőrinc Mészáros is the wealthiest Hungarian who gained his wealth from public procurements won under the prime ministership of Viktor Orbán. Orbán and Mészáros are friends, and both live in Felcsút, a small village near Székesfehérvár. It seems Mészáros wants to buy Austria Wien, one of the top soccer clubs of our western neighbour, which is in second place in the Bundesliga, only 3 points behind Sturm Graz.

Lőrinc Mészáros may buy a top Austrian football association

According to 444, the Hungarian entrepreneur from Felcsút is negotiating with Austria Wien about becoming a shareholder in one of Austria’s top soccer teams. Kurier, a local newspaper, wrote about the talks. Austria Wien needs an investor urgently because they have to buy back some shares from a minority owner by next Saturday. If not, share prices will increase by 20%, an unbearable burden since the club struggles with severe financial problems.

According to the newspaper, the football association’s primary target was to sell its stadium, Estadio Franz Horr, known as Generali Arena, for EUR 45-50 million. However, Lőrinc Mészáros is interested in the club, not the stadium. Reportedly, he expressed that interest months ago. 444 contacted the Mészáros Group with their questions but has not received an answer yet.

With a successful deal, Mészáros could become the minority owner of a renowned Austrian soccer association. So far, Austria Wien has won the Bundesliga 23 times, the Austrian Cup 27 times, and the Austrian Supercup 6 times. They are currently in second place of the Austrian Bundesliga, only three points behind Sturm Graz.

Mészáros owns Felcsút and NK Osijek

This is not the first time that the richest Hungarian has got into the news regarding the purchase of an Austrian club. Four years ago, Mészáros’s name came up in connection with Mattersburg as a potential buyer.

Mészáros is the owner of the Puskás Academy in Felcsút, the prime minister’s village. Felcsút is now a member of the top Hungarian football league.

Lőrinc Mészáros and PM Viktor Orbán — PM Orbán (c) and Lőrinc Mészáros (r). Photo: MTI

He also has an interest in Croatia’s football league by owning NK Osijek. The team struggled with financial problems before the acquisition, but under Mészáros’s ownership, it began to flourish. The Hungarian businessman built a new stadium and an academy for a lot of money. However, based on their financial reports, the club is now profitable, generating a solid HUF 6.7 billion (EUR 16.2 million) for the owner last year. That is four times what last year’s champion, Dinamo Zagreb, achieved (HUF 1.7 billion, EUR 4.1 billion). The team’s finances are exceptional in the first-class Croatian football league, in which it occupies 5th place.

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December 7, 2024

Fitch credit rating agency shares good news concerning Hungarian economy; will forint strengthen?

Fitch Ratings affirmed Hungary’s investment-grade sovereign rating and revised the outlook to stable from negative on Friday, the National Economy Ministry said in a statement.

Fitch affirms Hungary investment-grade rating, revises outlook to stable

The Fitch action shows the underlying fundamentals of the Hungarian economy are stable, the ministry said. All three big rating agencies have recently affirmed Hungary’s investment-grade ratings, it added.

Hungary’s assessment on international money markets is favourable and the popularity of Hungarian government securities continues, the ministry said. Strong investor and market confidence is reflected in successful bond auctions and continuous FDI inflows, including big investments set to boost economic growth by companies such as CATL, BYD, BMW, SEMCORP and EcoPro, it added.

Hungary’s government has created fiscal balance and balanced growth, the ministry said. Hungary’s financing position is stable, while the government is committed to strict budget management and to reducing deficit and state debt levels. By laying the foundations for a lasting upturn, the 2025 peacetime budget will contribute to putting the Hungarian economy back on the path of sustainable, high-level growth, a course affirmed by Fitch’s positive assessment.

Hungary’s economy is stable and resilient, and the country’s economic fundamentals are performing well, the ministry said, pointing to high employment levels, increasing consumption, low inflation and rising real wages.

The government aims to boost Hungary’s GDP growth over 3pc in 2025 by adopting a policy of economic neutrality and rolling out a New Economic Policy Action Plan that will boost purchasing power, ensure affordable housing and scale up SMEs with the Demjan Sandor Programme, the ministry said. The action plan will mobilise HUF 4,000bn of resources, it added.

Last credit rating agency review of year a success

The last credit rating agency review of Hungary of the year was a success, Finance Minister Mihály Varga said in a video message on Facebook, after Fitch Ratings affirmed Hungary’s investment grade rating and revised the outlook to stable from negative. Varga noted that credit rating agencies had conducted reviews of Hungary on twelve occasions during the year and affirmed the country’s investment-grade sovereign ratings in spite of the deterioration in the external environment.

Finance minister Mihály Varga nominated NBH governor by Viktor Orbán fitch — Photo: MTI

In recent weeks, S+P Global Ratings affirmed Hungary’s investment grade rating with a stable outlook, Moody’s affirmed its rating of the country, but revised the outlook to negative from stable, while Fitch Ratings revised the outlook on its rating to stable from negative, he added. Fitch acknowledged the stability of the Hungarian economy, the big reduction in inflation and growth of investments, Varga said. The rating agency’s analysts forecast accelerating economic growth and a narrowing budget deficit in the coming years, he added.

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December 7, 2024

Business climate in Hungary remains best, but industrial output down again

The climate for doing business amid the current circumstances remains the most favourable for big companies, exporters, foreign-owned enterprises and those in the industrial sector, a gauge of sentiment by the the Economic Research Institute (GVI) of the Hungarian Chamber of Commerce and Industry (MKIK) shows. Meanwhile, the industrial output edged down 0.2pc in October. Adjusted for the number of workdays, output dropped 3.1pc.

GVI’s survey of 2,102 managers showed small companies, dependent on domestic sales and businesses in commerce and construction were most exposed to the impact of the economic crisis.

GVI’s confidence index stood at +22 points in October, unchanged from April but three points higher than twelve months earlier.

Industrial output edges down 0.2pc in October

Output of Hungary’s industrial sector inched down 0.2pc year-on-year in October, a first reading of data released by the Central Statistics Office (KSH) on Friday shows. Adjusted for the number of workdays, output dropped 3.1pc. Output of most manufacturing branches rose in October, KSH said. Among the biggest ones, output of the automotive and electrical equipment segments declined, while output of the computer, electronics and optical equipment and the food, beverage and tobacco segments increased, it added.

In a month-on-month comparison, output rose a seasonally- and workday-adjusted 2.0pc. For the period January-October, industrial output declined 3.9pc year-on-year. KSH will release detailed data on output of industrial sector branches on December 13.

German automotive industry is the reason

Commenting on the fresh data, the National Economy Ministry said the month-on-month increase in output was reassuring. It also pointed to the “hectic” international environment as several countries in Europe faced economic and political crises at the same time. German automotive industry companies are scaling back as demand falls, with Volkswagen even planning layoffs, it added. In addition to the impact of the war in Ukraine, the circumstances are impacting the output of Hungary’s export-oriented economy and industry, the ministry said. The performance of Hungary’s industrial sector will improve as big local investments by multinationals such as CATL, BYD, BMW, SEMCORP and EcoPro are completed, it added.

Fiscal financing position stable, Orbán government says

Hungary’s fiscal financing position for 2025 is stable and all resources necessary for the New Economic Policy Action Plan are available, Peter Beno Banai, the state secretary for the budget, said presenting the country’s 2025 financing plan on Friday.

All conditions are in place to step up Hungary’s economic growth, Banai said. He added that Hungary had preserved its stable financing in recent years and kept its investment-grade credit rating.

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December 7, 2024

Car manufacturing in trouble in Hungary? 1 new plant and a new production hall inaugurated just today

Robert Bosch Automotive Steering Ltd inaugurated a HUF 46bn plant in Maklár (NE Hungary) on Friday. Furthermore, SK-Precíziós Szerszámgyártó inaugurates HUF 2.1bn production hall.

The investment was supported by HUF 10.5bn from the state, Minister of Foreign Affairs and Trade Péter Szijjártó said at the ceremony. He added that Hungary’s GDP growth was set to accelerate noticeably in 2025, in part because of automotive industry investments.

In two years, after manufacturing investments by Mercedes, BMW and BYD are completed, he said Hungary would be among five European countries that turn out an annual 1 million cars. Szijjártó noted that German-owned companies employed about 300,000 people in Hungary.

Robert Bosch Automotive Steering Kft managing director Michael Zink said the 37,000sqm multifunctional building would serve logistics purposes and house production of limited series products. The Bosch group in Hungary had net revenue of HUF 2,207bn in the 2023 business year.

SK-Precíziós Szerszámgyártó inaugurates HUF 2.1bn new production hall

German-owned precision tool maker SK-Precíziós Szerszámgyártó inaugurated a HUF 2.1bn production hall in Sárospatak (NE Hungary) on Friday. The state supported the investment, which created 50 jobs, with HUF 750m, Szijjártó said at the ceremony.

The plant is the German owner’s first abroad and creates an opportunity for local suppliers, he added. Last year, bilateral trade between Hungary and Germany reached EUR 70bn, he noted. Over the past ten years, German companies have invested HUF 3,800bn in Hungary, creating almost 40,000 jobs, he added.

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December 6, 2024

Orbán aims to scale up Hungarian SMEs with EUR 242M

The Demján Sándor Capital Programme, an element of the Demján Sándor Programme for scaling up local SMEs, will launch with an allocation of HUF 100bn in February, the state secretary for SMEs announced on Wednesday.

The programme will make capital financing available to SMEs for expanding their range of business partners and joining new supply chains, Richárd Szabados said. The 8+1 point Demján Sándor Programme is a part of the government’s New Economic Policy Action Plan. Szabados said the Demján Sándor Capital Programme was drafted with the participation of National Capital Holding and would be implemented with the support of the Hungarian Chamber of Commerce and Industry (MKIK).

The details of three more elements of the Demján Sándor Programme will be announced in the coming two weeks, he added.

National Capital Holding CEO Bence Katona said companies could apply for HUF 100m-200m in the framework of the Demján Sándor Capital Programme. The Hungarian Development Bank (MFB) will subscribe the investment fund units in the scheme and MKIK will be in charge of managing the investment fund, he added.

Companies with average annual revenue of at least HUF 300m and with at least two people on payroll may apply for the financing.

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December 6, 2024

Moody’s downgrades outlook for Hungarian banks

Moody’s Ratings on Thursday took rating actions on four Hungarian banks, reflecting the change to negative from stable of the outlook on Hungary’s Baa2 sovereign rating.

Moody’s upgraded the baseline credit assessment (BCA) of Austrian-owned Raiffeisen Bank to baa3 from ba1, reflecting the lender’s “sustained improved financial performance and robust profitability outlook”. It affirmed Raiffeisen Bank’s A3 long-term deposit rating.

Moody’s affirmed the ba1 BCA of K+H Bank, a unit of Belgium’s KBC, acknowledging the lender’s “solid franchise” as the country’s third-biggest bank, “good profitability” and “robust asset quality”. It affirmed the bank’s A3 long-term deposit ratings.

Moody’s affirmed the ba1 BCA of Austrian-owned Erste Bank Hungary, pointing to “strong earnings capacity”, “large liquidity buffers” and “sound funding profile”. It affirmed the lender’s A3 long-term deposit ratings.

Moody’s assigned negative outlooks to the long-term deposit ratings of all three banks, driven by the negative outlook on Hungary’s sovereign rating.

Moody’s affirmed the Baa2 foreign-currency backed senior unsecured debt and backed deposit ratings of the Hungarian Development Bank (MFB) with a negative outlook.

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December 5, 2024