Vladimir Putin’s spokesman has said Moscow hopes Hungary will continue its economic cooperation with Russia, while warning that Budapest’s recent actions could affect bilateral ties.
Kremlin hopes Hungary will continue economic cooperation
The Kremlin hopes “reason will prevail” in Hungary and that Budapest will continue its economic cooperation with Russia, Kremlin spokesman Dmitry Peskov said on Thursday. His comments came just hours after Russia announced that it was expelling 10 Hungarian diplomats in response to Hungary’s decision in September to expel 10 Russian diplomats.
Peskov said the Hungarian government had so far been cautious and had not taken what he described as “rash steps” concerning economic cooperation with Russia. He said Moscow therefore remained hopeful that the two countries could continue working together economically. At the same time, however, Peskov did not rule out a deterioration in economic relations.
“Unfriendly steps” by Budapest could have an impact on economic cooperation, he said, according to Russian state news agency TASS.
Russia responds to diplomatic expulsions
Hungary expelled 10 Russian diplomats in early September. The Hungarian authorities did not publicly identify the diplomats, but the move came amid concerns over Russian intelligence activity. Russia announced its response on Thursday, ordering 10 Hungarian diplomats to leave the country.
This dispute marks another strain on relations between Budapest and Moscow, although Peskov’s comments suggest the Kremlin does not currently want the dispute to spill over into economic cooperation. The remarks also come against the backdrop of important changes in Hungary’s foreign and energy policy.
Russian oil company still linked to potential NIS deal
According to Telex, Peskov’s comments may also be significant in light of the ongoing possibility that Russian oil company Gazprom Neft could sell its stake in Serbia’s NIS oil company to Hungary’s MOL. NIS operates Serbia’s only oil refinery, and the future of Gazprom Neft’s stake has become complicated by sanctions imposed on Russia. Gazprom Neft has nevertheless remained open to selling the stake to MOL. The deal has not yet been completed.
Meanwhile, Hungary has also been exploring energy cooperation with other European partners. Hungarian Foreign Minister Anita Orbán recently held talks with Latvian Foreign Minister Baiba Braže, with the two countries agreeing to restart foreign and security policy consultations that have been suspended since 2019.
The Russian embassy in Budapest responded with a sarcastic social media post after the talks, questioning whether Hungary had found its “new strategic energy partner” in Riga.
Living, working or doing business in Hungary?
Make things easier with professional support in English. Explore Daily News Hungary’s Services in English and find the help you need.
For whom would such an economic partner actually be of interest? Apart from raw materials—and often low-quality ones at that—the country has nothing to offer.
The financial situation of Russian companies continues to deteriorate. In January–July, they earned a total of 13 trillion rubles, according to Rosstat: this is the difference between the profits of profitable companies and the losses of unprofitable ones. This is the lowest figure since 2020, when COVID-19 lockdowns were in effect, reports The Moscow Times.
Compared to last year, Russian businesses’ earnings fell by 15.7%, and when adjusted for inflation, real profits declined by 21%. For the first seven months, they were nearly half (44%) of what they were in 2021, before the war.
Profitable companies saw their nominal profits decline by 5.3% over the year, while the losses of unprofitable companies rose by a quarter (25.6%). One in three firms is in the red: the share of profitable companies has fallen to 66.6%, nearly the same as in 2020 (65.7%).
Economic growth slowed sharply last year and has nearly come to a halt this year; companies are complaining about low demand in various surveys. They are caught in a squeeze: inflation remains high, costs are rising, but weak demand prevents them from fully passing these costs on to prices, and profits are falling. The desire to raise prices is hampered by difficulties in implementing it due to demand issues, explained economist Dmitry Polevoy.
High wages and interest rates are putting pressure on corporate profits, notes Alexey Klimyuk of Alfa-Capital, while the growing tax burden leaves them with even less money. He believes this is the reason for the decline in investment: businesses lack sufficient capital, and borrowing is too expensive. For this reason, the Institute of Economics of the Russian Academy of Sciences (INP RAN) identified the decline in profits as one of the key risks to the economy this year.
Over the past seven months, wages have risen by 12.2%, or 6% in real terms, according to Rosstat. Strong consumer demand is propping up the economy, continuing to keep it from sliding into a recession, according to analysts at Promsvyazbank.
But it is becoming increasingly difficult to profit from this demand. In the retail sector (excluding automobiles), profits fell by 20% year-over-year. Gazprombank analysts note Russians’ heightened price sensitivity, which “is shifting consumer traffic toward discounters and online delivery”. According to their estimates, discounters accounted for 94% of new retail space opened by the largest FMCG chains in the first quarter.
Meanwhile, investment goods are failing to find buyers due to a decline in investment, says Moscow State University professor Natalia Zubarevich. Sergey Tsukhlo of the Institute of Economics at the Russian Academy of Sciences notes a “complete loss of optimism” among industrial enterprises regarding future production.
Klimyuk points out another consequence of falling profits: companies’ credit ratings are deteriorating, and with them, lending terms. As a result, the number of defaults is rising, he concludes.
Extractive companies significantly increased their profits—by 36%, largely due to rising oil prices caused by the crisis in the Middle East; food and beverage producers—by 34% and 32%, oil refineries, which are profiting from rising fuel prices, and part of the defense industry. Manufacturers of “other transportation equipment” improved their financial results by 61%, while those of “computers, electronic, and optical products” saw a 20% increase.
https://ru.themoscowtimes.com/2026/09/30/pribili-rossiiskih-kompanii-ruhnuli-do-minimuma-s-pandemii-a207467
Fico’s Pro-Russian Government Faces Collapse! This was reported by Reuters.
In Slovakia, there is talk of early parliamentary elections due to the crisis within the ruling coalition led by Prime Minister Robert Fico. This was triggered by the resignation of Deputy Prime Minister and Minister of the Environment Tomáš Taraba.
Along with the opposition, deputies from the Slovak National Party (SNS)—which is part of the governing coalition and had previously nominated him for the position—voted in favor of Tarabu’s dismissal.
Consequently, this situation has cast doubt on the government’s survival one year before the scheduled parliamentary elections.
https://www.reuters.com/world/slovak-coalition-frays-with-ministers-removal-early-election-mooted-2026-09-29/
The Czech Republic is prepared to fulfill its NATO obligations and send troops to assist the Baltic states in the event of a possible Russian attack. This was stated by Czech Prime Minister Andrej Babiš, according to Reuters.
https://www.reuters.com/world/czechs-would-be-ready-respond-attack-baltics-prime-minister-babis-says-2026-09-29/?taid=6abbdaa7aae84d0001b86aba&utm_campaign=trueAnthem:+Trending+Content&utm_medium=trueAnthem&utm_source=twitter