HungaryTrends – The week in business and finance
Budapest (MTI) – See below MTI’s main business and financial news from the previous week:
LOWER RISK COSTS LIFT BANKING SECTOR PROFITS IN H1
Hungarian banks’ combined first-half after-tax profit rose 144 percent year-on-year to 343.4 billion forints (EUR 1.1bn) on a big drop in risk costs, data released by the National Bank of Hungary showed. Provisions plunged 87 percent during the period, from 547.1 billion forints to 70.4 billion forints.
GOVT AIMS TO TACKLE LABOUR SHORTAGE WITH LOCAL WORKFORCE, DEMOGRAPHIC POLICY
Hungary’s government wants to deal with a labour shortage in some sectors by filling positions with Hungarians who are still out of work and with a demographic policy that encourages families to have children, Prime Minister Viktor Orbán said in a weekly interview on public radio. Every Hungarian who wants to work should have the chance, Orbán said on Kossuth Radio, explaining that labour market reserves need to be mobilised to meet demand. Another, long-term fix for the problem is a policy that supports families that choose to have children, he added.
COLOPLAST INAUGURATES HUF 6BN EXPANSION IN HUNGARY
Danish medical supplies company Coloplast inaugurated a 6 billion forint (EUR 19.4m) production hall at its base in Tatabánya (NW Hungary). Coloplast will make the company’s newest family of products in the 20,000sqm production hall.
NBH PUTS 2016 DEFICIT UNDER GOVT TARGET, URGES STIMULUS
The National Bank of Hungary said this year’s general government deficit could be under the official target and recommended that the fiscal room for manoeuvre be used to support economic growth in a report. The NBH calculated the deficit could reach 1.8 percent of gross domestic product (GDP) if budget reserves are spent and 1.6 percent if they are not spent. The range, well under the 2.0 percent of GDP target in the budget act, leaves 100-150 billion forints of “room for fiscal manoeuvre which must be used to maintain and accelerate economic growth”, the NBH said.
HUNGARY, EGYPT LAUNCH BROAD ECONOMIC COOPERATION PROGRAMME
Hungary and Egypt launched a broad cooperation programme in the areas of industry, farming and energy during an official visit to Cairo by Foreign Minister Péter Szijjártó. The flagship of the programme could be a 900 million euro order for 700 railway carriages, Szijjártó said. A consortium of Hungarian and Russian companies has the best chance of winning the Egyptian order, he added.
SME LENDING CONTINUES TO EXPAND IN Q2
Hungarian creditors’ lending to small and medium-sized enterprises increased by 5 percent annually in the second quarter of the year, a National Bank of Hungary report showed.
MASTERPLAST H1 PROFIT FALLS ON FINANCIAL LOSS
Hungarian building materials maker Masterplast’s first-half net income fell 18 percent year-on-year to 1,428,000 euros, dropping on a financial loss, an earnings report showed. Revenue and cost of sales were flat during the period, and a change in inventories lifted operating profit, but a 182,000 euro financial loss weighed on the bottom line.
NBH LEAVES KEY RATE ON HOLD, AS EXPECTED
The National Bank of Hungary’s Monetary Council decided to leave the central bank’s base rate on hold at 0.90 percent at a policy meeting. The decision was as expected. The Council signalled an end to an easing cycle at a policy meeting in May and have since stood by their position on keeping the base rate on hold, while leaving room for the possibility of using unconventional monetary policy tools.
CONSUMER, BUSINESS CONFIDENCE FALLS TO YEAR-LOW IN AUGUST
Business and consumer confidence declined to a low for the year, according to a gauge by economic research institute GKI. GKI’s combined consumer and business confidence index fell to negative 3.9 points in August from nil in July. The business confidence index dropped to 1.2 points from 5.6.
AKK CUTS OFFER AT TWELVE-MONTH T-BILL AUCTION, RAISES OFFER FOR FLOATER
The Government Debt Management Agency (AKK) sold a combined 29 billion forints (EUR 94m) of securities at auction, 9 billion less than planned. AKK sold 17 billion forints of twelve-month discount T-bills, cutting its 30-billion-forint offer by nearly half after primary dealers bid for just 20.2 billion forints of the papers. AKK also sold 12 billion forint of three-year floating rate bonds, raising its original offer by 4 billion forints after dealers’ bids came to 28.4 billion forints.