Hungary and Equatorial Guinea are launching cooperation in the economy, energy, water management, and education, with relations based on mutual respect, the foreign minister said after meeting counterpart Simeon Oyono Esono Angue in Malabo on Monday.
Hungarian Foreign Minister visits Equatorial Guinea for the first time
He said new cooperation was especially important in an “era of dangers” when the war in Ukraine and illegal migration posed security challenges.
“Hungary and Equatorial Guinea both belong to a global pro-peace majority… Although the liberal mainstream press in Europe is trying to suggest otherwise when we look outside Europe or the transatlantic world … it is clear that we pro-peace people are in the majority,” Szijjártó said.
Africa “is on the cusp of a population boom, which warrants a comprehensive development plan,” he said. Failing that, “either Africa will see the largest humanitarian crisis of all time, or the largest migration pressure ever will weigh on Europe,” he said, adding that Hungary wanted to avoid both.
Hungary and Equatorial Guinea are launching cooperation in the economy, energy, water management, and education.
Agreements, cooperation
Szijjártó said the ministers had signed agreements on policy consultations and talks are ongoing on an economic cooperation agreement under which Hungarian companies would help Equatorial Guinea in tackling areas such as water management, modernising water supply systems and developing water security.
Cooperation between the two countries also focuses on Equatorial Guinea’s role as an important producer of natural gas and oil, he said.
“We know that the oil and gas fields are drying out. We in Hungary have developed a technology that would allow production to continue in depleted oil and gas fields sustainably and effectively. Those technologies could contribute to the development of Equatorial Guinea’s economy,” Szijjártó said.
He added that Equatorial Guinea has also shown interest in Hungarian tech in agriculture and the food industry.
Szijjártó and Oyono also agreed that Hungary will offer government grants to students wishing to study in Hungary, especially in health care.
“It is an honour to be here as the first Hungarian foreign minister visiting the country, and we are respectfully inviting you to Budapest to sign the agreements on economic cooperation and grants,” he said.
Data released by the Central Statistics Office (KSH) on Monday show that retail sales in Hungary rose 4.1pc year-on-year in August, adjusted for calendar year effects.
According to KSH, adjusted food sales increased 7.5 percent, non-food sales rose 2.9 percent, and vehicle fuel sales edged down 1.2 percent.
Unadjusted retail sales increased 3.2pc.
Retail sales rose 0.8pc in a month-on-month comparison, adjusted for seasonal and calendar year effects.
In August, retail sales reached HUF 1,668bn. Food sales accounted for 50% of the total, non-food sales 34%, and sales at petrol stations 16%.
For January-August, retail sales rose an adjusted 2.8pc and an unadjusted 3.1pc from the same period a year earlier.
Commenting on the fresh data, the National Economy Ministry said the upward trend that started in January continued in August. It added that a dynamic increase in real wages had supported retail sales growth.
The ministry augured continued growth in the sector as consumers’ caution eased. It added that higher retail turnover and the dynamic increase in tourism will be the “engine of economic growth”, it added.
Twenty-six professional organisations have published their position against a full out ban on short-term rentals in the capital on Turizmus.com.
Full-out ban for short-term rentals?
Acknowledging that short-term rentals were a housing, social, and tourism issue, the associations recommended that the government seek a “compromise between the current regulations and a full-out ban” on homestays.
They argued that tourism in the capital needed “sharing economy” accommodations favored by travelers adopting the “be like a local” trend. A full out ban would be “legal nonsense” and “economically irrational”, they added.
They warned that a full-out ban would result in “big losses” for catering establishments and tourism attractions in the capital and for Liszt Ferenc International Airport.
The associations pressed for a rethink of regulations on short-term rentals based on best practices in other big European cities, surveys, and studies.
Recently, a referendum was held in a central district of the capital in favour of a ban on home detention, details HERE. As no threshold was set and barely 20% of residents voted, Momentum’s mayor hailed the 54-46% vote in favour of the ban as a resounding success. Moreover, the government has adopted the opposition mayor’s initiative as a decisive result.
Hotel chains lobby, Hungarian families’ livelihoods
The Hungarian government has unsettled the market by not saying anything definite but raising the possibility of a complete ban. In addition, the government owns almost the entire supply of Hungarian hotels, so there is bound to be a lobby in favour of a ban.
At the same time, all the statistics show that those who choose to stay in short-stay apartments would not stay in hotels, so there could be a massive loss to Hungarian tourism after a misguided and forced decision.
Moreover, the government wants to impose strict restrictions to protect Hungarian families. Still, the vast majority of short-term accommodation is owned by Hungarian families, not by large corporations, so their decision is hitting Hungarian households.
In a statement issued on Monday, the National Economy Ministry addressed the associations’ communication and said the government aimed to tighten regulations on short-term rentals only in Budapest. The regulations taking shape do not “in any manner” affect the activities of tourism accommodations in the rest of the country, it added.
The government will continue to cooperate with all tourism sector organisations and is committed to maintaining a “lively professional dialogue”, the ministry said. It added that the government viewed the matter of short-term rentals as a housing issue, considering the impact of homestay regulations on home prices and rents.
PM Orbán talked about a shockingly quick wage rise in Hungary between 2025 and 2028 in his latest interview in the Kossuth Rádió. He said the average Hungarian wage should reach HUF 1 million, the minimum wage should be EUR 1,000, and the minimum wage would equal 50% of the average income. The maths only makes sense if the forint-euro currency exchange rate worsens significantly.
450-500 EUR/HUF exchange rate may come by 2027-2028
Orbán and his government determined three numbers in that regard. They said the average wage should be HUF 1 million (EUR 2,500), the minimum wage should be EUR 1,000, and the minimum wage should be 50% of the average salary. The calculation’s result is HUF 450/EUR, which is astonishing considering the public outrage that followed the end-2022 forint historic forint fall when the Hungarian currency reached 426/EUR. Thanks to the Hungarian National Bank’s intervention and the sky-high base interest rate they introduced, the forint stabilised at the 390/EUR level.
More paper money with less value? Source: Pixabay
If we bring the regular average wage in Hungary into the calculation, which, experience shows, is 10% below the average salary (HUF 900,000), the currency exchange rate increases to 500/EUR.
Before, the Hungarian government talked about a HUF 375,000 (EUR 933) gross minimum wage as their target until 2027. However, Orbán’s wage rise means the minimum wage should increase by 50% in the next three years. That would be a 16% annual rise concerning the average wage and 14.5% in the case of the minimum wage, provided the euro exchange rate remains at HUF 400/EUR.
Experts worried that the wage rise would bring inflation and forint fall
Only a powerful Hungarian economy could generate such an increase in the well-being of the Hungarians. However, the Hungarian economy is struggling. We wrote about the falling industrial output and a possible recession HERE.
The other option is skyrocketing inflation, which would burn the “extra money” of the Hungarian households, just like it did between 2022 and 2024.
Since Orbán wants outstanding economic growth (3-6%) in the next few years, the Hungarian National Bank will not be able to stop the fall of the forint with a high base interest rate.
As a result, both Portfolio and G7suggest the government’s aims are not coherent. If they want robust economic and wage growth, they will need to sacrifice the forint and create inflation. Another consequence can be that many small and medium companies will cease operation because of the wage-price spiral.
What’s more, Bank of America analysts wrotethat the forint is significantly overvalued, and a HUF 430/EUR currency exchange rate was realistic. They added that the Hungarian economy’s productivity stagnated, and the difference between the interest rates of Hungary and the EU decreased.
National Federation of Workers’ Councils agrees with govt targets
The National Federation of Workers’ Councils agrees that the minimum wage needs to be increased to the equivalent of 1,000 euros and the average wage from the current amount, some 600,000 forints (EUR 1,500) to 1 million forints, and that this would be possible within 2-3 years, the organisation said on Friday in response to an announcement by the prime minister earlier in the day.
PM Orbán told public radio on Friday morning that a cabinet meeting earlier this week discussed ways to achieve the 1,000 euro minimum wage and the increase of the average wage to 1 million forints. Orban said the plans could be fulfilled if they managed to agree with employers and employees.
The National Federation of Workers’ Councils said it would offer all the professional help needed for the plan’s success. It is important that social partners including workers’ interest representation bodies and trade union alliances are involved in the process to achieve a more active coordination of interests, and it could result in a reform of regulations on minimum wages, it added.
Read also:
Hungarian forint doing something unprecedented: further slip expected – read more HERE
Output of Hungary’s industrial sector fell 9.5pc in August, a first reading of data released by the Central Statistics Office (KSH) on Friday shows.
Adjusted for the number of workdays — of which there were two fewer than in the base period — output was down 4.1pc. KSHsaid output of most branches of manufacturing had declined in August, although output of three had increased, with the chemicals segment showing the biggest growth.
In a month-on-month comparison, output slipped 0.5pc, on a seasonally- and workday-adjusted basis. For the period January-August, industrial output declined 3.8pc year-on-year. KSHwill release detailed data on output of industrial sector branches on October 15.
Commenting on the data, the National Economy Ministry said the economy as a whole was expanding, even though some sectors were performing well and others poorly. Hungary is in eleventh place among European Union member states in terms of GDP growth, and its economy is expanding at around 50pc over the EU average, it added.
Photo: facebook.com/szijjarto.peter.official
It said the electricity, pharmaceuticals, chemicals and food segments
had grown in August and pointed to the impact of the weak performance of the German economy on the headline decline. According to 444.hu, Hungary may slide back into recession because of the low domestic consumption, the struggling industry and the underperforming agriculture.
Hungarians have cheapest, safest energy supply in Europe, says official
Thanks to the government’s utility price caps policy, Hungarians continued to pay the lowest prices in Europe for natural gas and electricity in September 2024, Szilárd Námeth, government commissioner in charge of the public utility cuts scheme, said on Facebook on Friday.
Natural gas is four times more expensive in Prague, three times in Warsaw, two and a half times in Bratislava and Bucharest than in Hungary, Nemeth said. In Stockholm, residents pay thirteen times more for natural gas than in Budapest.
As for electricity, Czech consumers pay four times more, Poles almost two and a half times more, Slovaks twice more and Romanians one and a half times more than Hungarians. Germans pay the highest electricity price in Europe, almost four and a half times more than Hungarian households.
Nemeth said the decision introduced in August 2012 successfully protected Hungarian families from the negative impact of the energy crisis caused by the war and the sanctions.
He said households were not obliged to take advantage of utility price caps, as they could also opt for market prices, “but nobody has ever taken that option so far”; not even those left-wing politicians who have constantly attacked and wanted to abolish the policy in the past twelve years. Opposition Tisza Party MEPs Peter Magyar and Gabriella Gerzsenyi also enjoyed the utilities price caps, that is why the Tisza party’s price-increasing utility price policy, “which serves the interests of America and Brussels, is hypocritical and lacks credibility”, Nemeth said.
Read also:
Hungarian forint doing something unprecedented: further slip expected – read more HERE
Orbán cabinet would buildnew dormitories, boost economy, review rental and Airbnb regulations in Hungary
Prime Minister Viktor Orbán said an “economic cold war” was “the worst thing that could happen” to Europe and Hungarians in a weekly interview with public radio on Friday.
Orbán said an economic cold war presented a “huge danger” to Hungary’s export-oriented economy, and that the government was adopting a policy of economic neutrality to protect families’ standard of living.
He noted that the European Union would take a decision in the course of the day on punitive tariffs on Chinese goods, a measure Hungary opposed. He warned that the measure would harm the EU’s own competitiveness, adding that even the Germans were opposed to the step.
He said a cabinet meeting earlier in the week had discussed measures to support the policy of economic neutrality.
Photo: MTI
Economic growth should be 3-6%, Orbán says
Orbán warned of attacks against the government’s policy of economic neutrality, with the aim of pushing the country down the path of blocs, “where there’s no growth, no development and no future”.
He said Hungary didn’t want to return to a time in which the world was divided into blocs, adding that a policy of economic neutrality could boost Hungary’s economic growth to 3pc-6pc. He added that decoupling the economies of the East and West would make it more difficult for Hungary to find markets for its products, and that would impact workplaces and wages.
He said Hungary wanted to trade with both blocs, without being “squeezed into” any one and would apply its policy of economic neutrality to markets, investments, financing and energy.
He added that the success of the government’s policy would be its validation.
Ambitious wage increase plans
Assessing the economy, Orban acknowledged that some sectors were in a difficult position, while others were doing well. He added that the tourism sector had finished a record year and the food industry was doing well, but the automotive industry was “sputtering” as export markets in the West stagnated.
Orbán said Hungary’s minimum wage could reach EUR 1,000 per month in the coming 2-3 years, while the average wage could rise from around HUF 600,000/month (EUR1,500) to HUF 1m (EUR 2,500).
He noted that talks were ongoing between employers and unions on an agreement on minimum wage rises. He added that the economy minister had been tasked with seeing an agreement was reached by year-end.
He said the agreement should extend for several years and result in the average wage reaching HUF 1m/month at the end of the period. He added that higher wages were the only way to manage higher prices in the long term.
He said the government faced a “dilemma” with regard to cutting taxes and the impact on public sector wages. He explained that if employers’ tax burden was reduced, they could afford to pay their workers more, but public sector wages could only rise if there was more tax revenue.
Labour shortage in Hungary
He said public sector wage growth wasn’t keeping pace with wage rises in the business sector, with the exception of sectors, such as healthcare and education, in which the government had launched wage programmes.
Orbán said there were now 60,000-70,000 unfilled positions in Hungary, more than the number of people who could and wanted to fill them, while the government had brought the unemployment rate down from 12.5pc when it came to power. That “fantastic success” is “taken for granted” today, he added.
He said the quality of Hungary’s labour force was a draw for investors.
Hungary’s EU presidency promoting peace, Orbán says
Hungary, as part of its EU presidency, is striving to promote peace, Orbán said in an interview to public radio on Friday. “We have a peace mission,” he said. If a broader war emerges in the Middle East, the effects would be felt immediately as the world economy would become cautious, putting downward pressure on the forint, Orbán said.
What happens in the world, he said, was not only an important economic consideration, and a war in the Middle East could also affect the country’s security, he said, noting the “large number of citizens of Jewish origin” in Hungary affected either directly or indirectly.
Orbán noted that he had convened the National Security Cabinet to discuss how to ensure the security of all Hungarian citizens, regardless of their origin.
Meanwhile, referring to the Friends of Peace international group established recently, Orbán said that when Hungary took over the EU presidency, promoting peace as a Christian spiritual consideration and state interest had been “unavoidable”.
Storm-like Hungarian EU presidency
“We began with a storm: Kiev, Moscow, Beijing, Donald Trump,” he said, adding that the peace strategy that then ensued was based on the understanding that the warring parties had no intention of making peace with each other.
Putin and Orbán in July in Moscow. Photo: FB/Orbán
Photo: FB/Orbán
Viktor Orbán and Chinese President Xi Jinping. Photo: FB/Orbán
He said that if, as it appeared, the belligerents were unwilling to make pace, then an agreement between key international forces was needed to establish a world policy that could guide the warring parties in the direction of peace.
Hence, the Friends of Peace was founded “at our initiative, alongside Brazil and China”, Orbán said.
Meanwhile, Orbán said conflicts due to migration would “tear the European Union apart” and “paralyse its operations … if Brussels does not come to its senses and changes its policy that supports and attracts migrants to a policy that … that protects the border.” He added that if Brussels carried on “tormenting Hungary with all kinds of punishments” in connection with migration, then “we’ll transport the migrants to the main square [in Brussels] by bus…”
Brussels bureaucrats destroying the life of the people
European people, he said, would no longer tolerate “Brussels bureaucrats in their protected bubble” forcing a policy on Europe “that destroys the lives of ordinary Italian, German, French and Hungarian people”.
The prime minister said this is why Andrej Babis won in Czechia, why the Freedom Party in Austria, and why the AfD was performing well, why Marine Le Pen was “at the front gate”, and why the Italian prime minister had won.
On the domestic front, Orbán announced that families with children would see their situation improve noticeably in the next two years as the government planned to double tax relief for children in 2025. He said the measure was planned to be phased in two steps next year. “I’m not going to compromise on this,” he added.
Read also:
Hungarian forint doing something unprecedented: further slip expected – read more HERE
Gergely Gulyás, Minister of the Prime Minister’s Office, said the government does not have a goal concerning the interest rates and the currency exchange rates. Gulyás added that the Hungarian National Bank had to stop the forint’s fall. Experts do not exclude a 403 EUR/HUF rate.
According to 24.hu, Gulyás told the Hungarian press today that foreign causes are behind the weakening. The government does not have a goal concerning the interest rates and currency exchange rates, he added. Gulyás said the Orbán cabinet did not change the deficit target, it remained at 4.5%. He suggested the weak forint is an issue the Hungarian National Bank should solve. Furthermore, foreign reasons are behind the fall of the Hungarian national currency. Therefore, they hope an opposite trend will start soon.
Gergely Gulyás in the Tisza Castle in Geszt briefing press after the government meeting finished. Photo: MTI
Even a 403 EUR/HUF exchange rate is imaginable
Experts talking to index.hu were not that optimistic. The forint is currently at a 1.5-year low against the euro. The main reason behind the weakening is the Iranian missile attack against Israel.
The forint weakened further on Thursday, after slipping past 400 to the euro on Wednesday. The forint traded at 401.47 to the euro around 5:30 in the evening, weakening from 400.48 late Wednesday. But at 1 PM, it reached even the 402 EUR/HUF exchange rate level. The forint softened to 364.52 from 362.70 against the dollar. It eased to 427.00 from 426.67 to the Swiss franc, the Hungarian News Agency wrote.
Photo: deposiphotos.com
Zoltán Varga, a senior analyst of Equilor Investment Ltd., could not exclude the 403 EUR/HUF exchange rate in a quick analysis to index.hu.
Investors try to avoid risks
Other external bad news also affected the forint in the last few days. For example, even Christine Lagarde, the head of the European Central Bank, was concerned about the dissatisfying Eurozone growth data. Moreover, Jerome Powell, President of the Fed, sent a message boosting the American dollar, which always threatens emerging currencies.
All in all, investors try to avoid risks, which is disadvantageous for the forint.
Hungarian government weakens the forint
Meanwhile, Portfolio, a Hungarian economy-focused magazine, suggested that the Orbán government intentionally weakened the forint. That is because one of the main elements of the Hungarian economic model is competitiveness. However, Hungary’s competitiveness is falling due to the financial crisis, the ailing exports, the unnatural wage rise, the high-pressure economy and high inflation. As a result, the continuous weakening of the forint is favourable for the Hungarian government’s economic aims. For example, Gergely Gulyás talked today about an ambitious minimum wage rise until 2028. Meanwhile, the Polish zloty reached a historic peak against the Hungarian forint.
Hungary makes strides in improving business environment
Hungary is among the best performing countries in the World Bank’s Business Ready 2024 report that assesses the regulatory framework and public services directed at companies, the National Economy Ministry said on Thursday. Hungary ranked at the top of the regulatory framework pillar of the B-Ready 2024 report, among 50 countries. It was in fifth place in the public services pillar and in 14th in the operational efficiency pillar.
UPDATE: Forint little changed to euro on interbank forex market
The forint traded at 401.56 to the euro around 10:00 in the morning on Friday, little changed from its rate of 401.47 late Thursday. The forint firmed to 364.19 from 364.52 against the dollar. It eased to 427.44 from 427.00 to the Swiss franc.
UPDATE 2: Orbán believes the forint loses its value due to the Lebanese conflict
PM Viktor Orbán gave an interview to the public media on Friday morning saying that the forint loses its value because of the Lebanese conflict.
Read also:
Morgan Stanley predicts euro could reach 410 forints amid worsening economic outlook – read more HERE
Hungary wants to stay out of the “cold trade war” declared by Brussels and Western Europe and adopt a policy of economic neutrality, Gergely Gulyás, the head of the Prime Minister’s Office, said at a press briefing during a cabinet meeting in the renewed Tisza Castle in Geszt, in the southeast of the country, on Thursday. The government also talked about how to boost the economy and the need of new regulations concerning the rental and short-rental, Airbnb markets.
Gulyássaid that such a trade war presented “extraordinary risk” to Hungary’s export-driven economy, cutting off the country from markets and investment opportunities. He added that a policy of economic neutrality would help achieve the government’s GDP growth target of 3pc-6pc.
If that level of growth can be achieved, wages will rise, budget revenue will climb and the success of the government’s economic policy will be validated, he said.
Gergely Gulyás in the Tisza Castle in Geszt briefing press after the government meeting finished. Photo: MTI
Stimulating economic growth top priority
He said the cabinet meeting had assessed and weighed the outlooks for the Hungarian and the European economies over the past three days. He added that the fundamental changes to the global economy brought on by the pandemic and the impact of the war in Ukraine required new responses and a new economic policy.
He noted earlier announced government decisions to introduce a credit scheme for young blue-collar workers and a capital programme for SMEs, as well as doubling the tax preference for families with children by January 1, 2026. He said the government would also make a priority of affordable housing, wage increases based on economic growth, and advances for SMEs. Related measures will be drafted in detail by the end of October and submitted to lawmakers with the 2025 budget bill early in November, he added.
The Orbán cabinet in the Tisza Castle in Geszt. Photo: MTI
Orbán cabinet wants to ease housing problems with regulating Airbnb?
He pointed to programmes supporting dormitories and housing for young people and acknowledged the higher rate of home ownership in Hungary in comparison with Western Europe. He said the appreciation in home values in recent years had resulted in a housing challenge, especially for young people. He added that the economy ministry had been tasked with reviewing international practices regarding rental regulations, including those for Airbnb-type short-term rentals.
He said the government would make accelerating home construction and ensuring affordable housing a “priority task” over the next two years.
He said the government wanted employers and unions to reach a multi-year agreement on minimum wage rises that would feed through to the average wage.
Gulyás said the economy minister also had a mandate to draft measures on further incentives for improving the position of SMEs in the coming 2-3 weeks.
Fielding questions, Gulyás said a HUF 500bn increase in the deficit target was “technical”, noting that the 4.5pc target relative to GDP was unchanged and “achievable”.
He said the forint’s recent weakening was mainly due to external political and economic factors, such as the situation in the Middle East. The government has no concrete exchange rate target, rather the goal is to avoid volatility, he added.
Significant minimum wage increase will come
Asked to comment on National Economy Minister Márton Nagy’s projection that the minimum wage would reach EUR 1,000/month by the start of 2028, Gulyás said it was “completely realistic”.
He said a number of proposals had come before the government on regulating short-term rentals, but a decision on the matter hadn’t been taken yet. The issue requires careful consideration as it involves complex legal problems, he added.
Gulyás said the state’s acquisition of a controlling stake in regional railway company GYSEV was of “great significance” and the company could serve as a paradigm for levels of service in public transport.
10pc minimum wage rise would be ‘manageable’ for construction industry, trade union says
A 10pc minimum wage rise for 2025 would be “manageable” for construction industry companies, the National Federation of Hungarian Building Contractors (ÉVOSZ) said on Thursday. Talks between employers, unions and the government on next year’s minimum wage increase are ongoing. ÉVOSZ said that an annual 10-11pc minimum wage increase in 2026-2027 could only be implemented parallel with a number of economic development measures, more favourable lending conditions and an improvement in industrial efficiency.
ÉVOSZ noted that wages in the construction sector had risen 17.5pc, on average, in 2023 and were set to climb by 12pc in 2024. It added that wages in the sector were still just 80pc of the national average for the business sector. ÉVOSZ said order stock was under 80pc of last year’s levels at around 90pc of businesses, adding that redundancies couldn’t be excluded given the circumstances. It also pointed to the impact of exchange rates on the sector.
Read also:
State-owned Hungarian energy company can conquer Romania’s market after large-scale acquisition – read more HERE
Lóga noted that the automotive industry, one of the pillars of the European economy, played an outsized role in Hungary’s competitiveness.
He said Hungary aimed to be a “bridge” linking automotive industry know-how from the East and the West.
He added that the pandemic, the war in Ukraine and the energy crisis had exacerbated Europe’s long-standing competitiveness problems.
Addressing the outlook for Hungary, Lóga said inflation had fallen back into the central bank’s tolerance band, but a growth rebound on external markets remained to be seen as the German economy was in the doldrums. According to HVG, Lóga said Hungary’s GDP growth should reach 3% next year.
He pointed to the automotive industry’s “key role” in boosting competitiveness in the EU and noted a ban on internal combustion engines in force from 2035. He said the increasing market share of EVs had slowed after years of growth and suggested decision-makers and car makers could provide a catalyst for further growth.
Orbán cabinet says no on punitive tarrifs
Hungary’s government believes in international competition, instead of punitive tariffs, he said.
Lóga said battery investments in Hungary, the result of partnerships between automotive industry companies in the East and the West, would cause battery manufacturing capacity in the country to quintuple by the end of the decade. He added that the country would become the fourth-largest battery maker in the world.
Fielding questions at a talk after his presentation, Lóga said consumption, investments and exports could be the biggest engines of GDP growth in the coming year. He added that SMEs would be the focus of investments in the coming year to year-and-a-half.
He noted recently announced programmes for SMEs and said the government aimed to use capital investment, credit and grants to boost propensity to make investments.
Read also:
Are police hindering the operation of 26 speed cameras in Budapest? – read more HERE
Hungarian ministry launchesconsumer protection investigation due to unfair contract terms by car sellers
Subsidies supporting solar panel and battery storage investments have been paid out to more than 3,000 households, the Energy Ministry said in a post on Facebook on Thursday.
Households whose applications have been cleared in the scheme, launched in January, could be awarded HUF 83bn in subsidies, the ministry said. It noted that the funding allocation had been raised by HUF 30bn in the summer amid strong interest.
The scheme could support solar panel and battery storage investments at over 25,000 homes.
Under the scheme, households may apply for up to HUF 5m in support, covering two-thirds of investment cost.
More than 285,000 homes in Hungary have solar panels.
Read also:
Support from Brussels: Hungary to expand renewable energy in district heating with €238M investment plan – read more HERE
State-owned Hungarian energy company MVM allegedly shook hands with the German E.ON group to buy its Romanian subsidiary, E.ON Energie. The subsidiary is the second biggest on the market with a 41% market share, but the Romanian government is concerned about the transaction due to the Orbán cabinet’s strong Russian ties. Will the Talgo case happen again?
State-owned Hungarian energy company buying Romanian top energy company
According to sources sharing information about the planned acquisition with Hotnews.ro, the state-owned Hungarian energy company MVMwould buy E.ON Energie. They will sign the documents only after the Romanian elections. The first round of the presidential elections will be on 24 November. The second round has been set to take place on 8 December. On 1 December, Romanian citizens will cast their ballots in the parliamentary elections. However, German E.ON and Hungarian MVM would only like to announce the transaction after the presidential and parliamentary elections.
Photo: FB/MVM
Sources talking to Hotnews about the large-scale acquisition said the Hungarian company wanted to obtain E.ON Energie’s provision business and planned to buy the distribution activities. Before, E.ON conducted talks with other companies like Romgaz and OMV Petrom about the transaction. Allegedly, they shook hands with the Hungarian energy company.
Photo: FB/MVM
Romanian press wrote that the Ciolacu cabinet is concerned about the developments. Sources said the prime minister’s office would create a committee to examine the arrangement. Romanian top officials are worried due to the Hungarian government’s Russian ties. Since MVMis state-owned, they suspect risks since they believe there is a chance that millions of Romanian customers may get under the influence of the Hungarian government having good ties with Putin’s Russia, portfolio.hu wrote in their summary.
Will the Talgo case happen again?
We wrote HEREthat Hungary’s Ganz-MaVag consortium made a generous offer to acquire 100% of the shares of the Spanish train manufacturer Talgo. However, from the start, the Spanish government opposed the deal, citing Hungarian Prime Minister Viktor Orbán’s pro-Russian policies. Eventually, Spain successfully prevented the transaction, leaving Hungary reliant on outdated, 20–30-year-old Western European train carriages.
Putin and Orbán in July in Moscow. Photo: FB/Orbán
E.ON Energia provides gas for 3.4 million customers in Romania. It is the second largest market player with a 41% market share after Engie. In addition, they have an approximately 5% market share in the electricity sector.
Loss-making company in Hungarian ownership
E.ON noted that they would like to sell their subsidiary because of the uncertainties of the Romanian market, posing significant risks and instabilities. The reason is the Romanian government’s frequently changing energy price caps and compensation rules. Romania privatised E.ON Energie in 2004, selling it to E.ON Ruhrgas for EUR 300 million. Currently, 68.18% of the shares are owned by E.ON Romania. The Energy Ministry of Romania had 31.82%.
Currently, the possible transaction concerns only the provision business. In 2022, E.ON Energie had a EUR 2.75 billion income but generated an almost EUR 72 million loss.
Read also:
Hungary’s dependence on Russian oil is problematic, according to analyst – Here’swhy
According to the latest inflation report from the Hungarian National Bank (Magyar Nemzeti Bank, MNB), which aligns with analyst forecasts, lower oil prices are expected next year. As a result, petrol prices could temporarily approach the psychological threshold of HUF 500 (EUR 1.25) per litre. However, a less optimistic forecast is that natural gas prices are expected to rise.
The MNB’s quarterly inflation reports serve as a useful guide for energy prices and anticipated inflation trends, Mfor reports. The good news is that the central bank believes the alarming inflation rate, which had been nearly 20% annually, is behind us. In fact, consumer price growth could be even lower next year compared to this year’s more moderate figures. Current projections estimate inflation to be between 3.5% and 3.9% in 2024, 2.7% to 3.6% in 2025, and 2.5% to 3.5% in 2026 on an annual basis.
Petrol prices could fall
A positive outlook on the price of petrol in Hungary. Photo: Alpár Kató/Daily News Hungary
The MNB’s analysis suggests that their earlier assumptions about world oil prices, expressed in dollars, have been adjusted downward from their June estimates. The Brent crude price fluctuated around USD 80 per barrel in August, but by early September, it dropped to around USD 70. The increased volatility in global oil prices over the past few months has introduced uncertainty into the bank’s fuel price forecasts.
If the decline in oil prices continues next year, it will likely be reflected in the prices of refined products, including fuel. However, the key question is whether tax regulations will change, as adjustments to these rules could complicate price expectations, particularly given the current budgetary issues, Mfor writes. The exchange rate of the forint also has an impact on petrol prices. If neither of these factors leads to significant price increases, a Brent price falling below USD 65 could see petrol prices approaching the psychologically important HUF 500 per litre mark at domestic stations.
On the other hand, the report warns of rising natural gas prices due to the ongoing Russia-Ukraine war. The current world market price is around EUR 30 to 40 per megawatt-hour, with an average price of EUR 33.4 expected this year. However, according to the MNB’s evaluation, this price could increase by more than EUR 5 next year. Although this price change won’t significantly affect inflation, there could be substantial price hikes if the government imposes new taxes on gas. While this scenario is possible, it is not certain, Mfor reports.
MNB deputy governor addresses Silk Road Fund conference in Beijing
MNBDeputy-Governor Csaba Kandrács addressed an international conference in Beijing organised to mark the tenth anniversary of the establishment of the Silk Road Fund on 29 September, the central bank said on Wednesday.
Kandrács pointed to the need for a balanced global financial network that could support sustainability in his remarks. He said the NBH was “at the forefront” in terms of green finance, being the first bank in Europe to get a green mandate while launching a number of green programmes and supporting cooperation among international green initiatives.
Kandrács and his delegation from the NBH held talks with Xuan Changneng, the deputy governor in charge of international relations at China’s central bank, on the sidelines of the conference.
Hungary news – The number of registered jobseekers in Hungary stood at 228,356 in September, practically level with the number a year earlier, the National Economy Ministry said on Tuesday, citing data from the National Employment Service (NFSZ).
The ministry said the September figure was the lowest for the month in more than three decades.
Sandor Czomba, the state secretary for employment policy, said the number of Hungarians in the primary labor market had increased by 42,000 over the past twelve months, while the number of people in fostered work programs had dropped by 10,000 to 58,000. Employment among women has climbed in recent months, showing the impact of government measures to boost labour market activity, he added.
According to the latest data from the Hungarian Central Statistical Office, the number of employed persons increased by 39 thousand to 4.748 million in August 2024 compared to the same period of the previous year. In addition, the number of economically active people is also growing steadily, with an increase of 53 thousand compared to August 2023, the ministry said.
The unemployment rate has stabilised at a low level, with Hungary being the eighth country in the European Union with the lowest unemployment rate.
Hungary news – the latest data on economic indicators are now available:
Hungary govt sector deficit reaches 3.7pc of GDP in H1
Preliminary data released by the Central Statistics Office (KSH) on Tuesday show that Hungary’s government sector had a HUF 1,489 bn deficit in the first half, equivalent to 3.7pc of GDP.
Government sector revenue rose 8.3pc to HUF 16,825bn (EUR 42m), while expenditures increased 3.5pc to HUF 18,314bn (EUR 42m).
Revenue from social insurance contributions climbed by 14.1pc or HUF 511bn (EUR 1.29bn), and revenue from taxes on production rose by 7.4pc or HUF 470bn (EUR 1.18bn), while revenue from taxes on income increased by 17.5pc or HUF 462bn (EUR 1.16bn).
On the expenditure side, investment spending fell by 7.0pc or HUF 80bn, but interest expenditures climbed by 11.8pc or HUF 195bn.
Alone in the second quarter, the government sector deficit reached HUF 469bn, equivalent to 2.3pc of GDP, KSH said.
Exports climbed 4.8pc year-on-year to EUR 11.815bn. Imports rose 8.8pc to EUR 11.648bn.
Trade with other European Union member states accounted for 74pc of Hungary’s exports and 70pc of its imports during the month.
Hungary’s terms of trade deteriorated 1.7pc during the period as the forint weakened 3.6pc against the euro and 5.6pc to the dollar.
For the period January-July, Hungary had a trade surplus of EUR 7.937bn. Exports fell 4.3pc to EUR 85.144bn and imports declined 8.4pc to EUR 77.208bn.
Hungary’s seasonally-adjusted Purchasing Managers Index (PMI) stood at 49.7 points in September, rising from 47.7 points in August, the Hungarian Association of Logistics, Purchasing and Inventory Management (Halpim) said on Tuesday.
The PMI was below the 50-point threshold that signals expansion in the manufacturing sector.
Among the PMI sub-indices, the new orders index rose and was over the 50-point mark.
The production volume index increased and indicated expansion.
The employment index fell and continued to show a contraction.
The delivery times index rose.
The gauge of purchased inventories increased but was still under the 50-point mark.
He also said that the hearing of the new central bank governor is expected to take place during the spring term. Should the head of one of the economic portfolios be nominated, and the two ministries merge, then parliament will have to decide only about the name change for the ministry, he added.
The government’s legislation agenda contains 20-30 entries, mostly aiming harmonisation with EU legislation and amendments of long-standing laws, he said. The election system will not be changed, except for a modification of electoral districts warranted by demographic changes since they were drawn in 2012, he added.
The first day of parliament’s autumn session traditionally starts with a speech by the Hungarian Prime Minister. This was the case again this time, with Viktor Orbán setting out the most important issues for him:
Orbán: ‘We will protect Hungary’s sovereignty, independence’
Hungary’s government will not hesitate to use all the tools at the state’s disposal to protect the country’s sovereignty and independence, PM Orbán said on Monday, the first day of parliament’s autumn session.
“We will protect Hungary from any sanctions that threaten the interests, security, well-being, and health of the Hungarian people,” Orbán told lawmakers.
He said Hungary’s government was nationally minded, making it a sovereigntist government. “International cooperation is an important and nice thing, but we know that we can only rely on ourselves,” the prime minister said, adding that national unity and governance had been the answer in “troubling times” throughout Hungary’s history.
“In certain European countries, including Germany, this happened the other way round, and that’s why they’re distrustful and at times even hostile to sovereign governments and sometimes openly and sometimes covertly seek to limit the sovereignty of national governments,” the prime minister said.
Orbán: New economic policy requires new tools
Prime Minister Viktor Orbán addressed lawmakers in parliament on Monday, at the start of the autumn session, and pointed to the need for a new economic policy and new economic solutions to achieve economic success.
Orbán said that without a new economic policy, Hungary can’t preserve the results it has achieved so far. He added that the pandemic, the war in Ukraine, and sanctions policies had accelerated the transformation of the global economy.
He also noted efforts to decouple the economies of the East and the West and said the success of those initiatives would be the “worst-case scenario” for Hungary. He added that Hungary’s economy depends on being able to manufacture products competitively for the global market.
He said the government respected “100 percent” the central bank’s independence and the interest rate environment shaped by its monetary policy.
Orbán said the first “action plan” containing government economic policy measures would be submitted to lawmakers with the 2025 budget bill. That plan includes measures to roll out workers’ credit, similar to student loans, to make more capital available to SMEs, to double tax preferences for families with children, and to make the annual pensioners’ bonus permanent.
He said those measures could give impetus to Hungary’s economic growth, adding that the country’s GDP growth needed to reach 3pc-6pc.
‘We’ll transport migrants banging on Hungary’s doors to Brussels’ main square’
“if Brussels continues to insist on the decision punishing Hungary for its stance on migration … we will transport migrants who are banging on Hungary’s doors to its main square”.
Viktor Orbán told the assembly that the issue of migration fuelled heavy debates throughout Europe during the summer.
He noted that Germany closed its borders, France’s new prime minister announced restoring order at its borders, the Netherlands announced drafting its strictest-ever anti-migration laws, and the governments of Sweden and Finland are also discussing their own anti-migration laws.
“The era of free travel will soon be over,” the prime minister said.
He said, “All that would have been needed was to accept Hungary’s advice and follow Hungary’s model of disallowing migrants to enter [the EUn] right at the beginning.”
“And as regards the war [in Ukraine], Hungary will be right, too, just like it was on the issue of migration. There is no solution to the war in the battlefield, where there are only casualties, human suffering and destruction. We need a ceasefire, negotiations and peace,” said Orbán.
read also – Official of Orbán cabinet says they would NOT have defended Hungary in case of a Russian invasion – UPDATED with PM Orbán’s reaction
Hungary’s growth 50pc over EU avg
Prime Minister Viktor Orban said that Hungary’s economy is expanding at a rate 50pc over the European Union average, but it needs to grow even faster.
Orbán said Hungary’s financial position was “untroubled”.
He noted that Hungary’s 24.5pc investment rate put it in fourth place in the EU, but said the top spot should be the goal. He added that 4,740,000 people were working in Hungary, while the average wage had climbed by 14pc, or 9.4pc adjusted for inflation, in the past year.
He acknowledged that state debt stood around 75pc of GDP, but reaffirmed the 50pc target. He said the budget was “doing well in pro rata terms” to achieve the 4.5pc-of-GDP deficit target.
Prime Minister Viktor Orbán said that Hungary and the Hungarian state have become stronger over a decade.
The prime minister told lawmakers that compared with the flood of 2013, the Hungarian state was now “more effective, more organised and better prepared”, adding that the decision to extend the flood defence lines after 2013 had been the right one.
This past month’s sudden flood wave was the second biggest one this century, Orbán said, noting that flood protection efforts were under way along the full stretch of the Danube, from Gyor in the northwest to Mohacs in the south. “The flood defence went well and we managed to avert trouble,” he added.
Orbán thanked those who contributed to the flood defence work for their efforts. “We saw once again that if there’s trouble, Hungarians show exemplary unity,” he said. “Something from this should be carried over to peacetime.”
Orbán: Tourism sector finishes ‘record summer’
PM Orbán said that Hungary’s tourism sector reached record highs this summer.
Orbán said the number of Hungarians who took domestic trips and the number of foreigners who visited Hungary had never been higher than in summer. The number of Hungarians who travelled abroad also reached a new record, he added.
He noted that the government had repurchased the operator of Budapest Liszt Ferenc International in the summer and said passenger numbers at the airport were set to climb to 17.5 million this year.
Factory gate prices in Hungary rose 3.0pc year-on-year in August, data released by the Central Statistics Office (KSH) on Monday show.
Prices for domestic sales rose 1.2pc, and export prices climbed 4.0pc.
KSH says domestic prices in the manufacturing sector, which account for 60.0pc of the PPI, rose 2.7pc year-on-year. Domestic energy prices, which account for 38.6pc of the PPI, fell 2.2pc.
Export prices of the manufacturing sector, which have an 82.9pc weight in the PPI, rose 2.5pc, while energy sector export prices, with a 16.7pc weight, climbed 8.8pc.
In a month-on-month comparison, factory gate prices rose 1.3pc as prices for domestic sale edged up 0.2pc and export increased 1.8pc.
In January-August, factory gate prices fell 1.0pc year-on-year as prices for domestic sales decreased 3.1pc and export prices inched up 0.1pc.
Guest nights at commercial and private tourism accommodations in Hungary rose 3.6pc to 6,987,000 in August from the same period a year earlier, data released by the Central Statistics Office (KSH) on Monday show.
Hungary’s guest nights in August
The number of guest nights spent by domestic travelers rose 3.7pc to 3,942,000, while guest nights spent by foreign visitors climbed 3.5pc to 3,045,000, KSH said.
Revenue from commercial accommodations, which include hotels, bed-and-breakfasts, campsites, resorts, and hostels, rose 8.5pc to HUF 140bn.
In August, 37,333 tourism accommodations hosted guests, including 2,972 commercial accommodations and 34,361 private and other accommodations.
For January-August, the number of guest nights at tourism accommodations rose 5.5pc year-on-year to 31,454,000. The number spent by domestic travelers increased 2.4pc to 16,314,000, and the number spent by foreign tourists climbed 9.1pc to 15,141,000.
The number of international tourism nights increased most in the Gyula region (by 12%), while the Greater Budapest tourism area saw the largest decrease (by 14%) compared to the same period of the previous year. The number of international tourism nights spent in tourist accommodation establishments increased by 9.2% in Budapest and fell by 1.4% at Lake Balaton.
The total gross sales revenues of tourist accommodation establishments amounted to nearly HUF 140 billion, which was 8.5% higher at current prices than a year earlier.
Commenting on the fresh data, the National Economy Ministry noted that guest nights in the capital exceeded 1.6 million in August, accounting for 23.9 percent of the total.
The ministry said tourism sector data for January-August “exceeded all expectations” and was “far ahead” of the average growth rate for the European Union as a whole.
It added that passenger numbers at Budapest Liszt Ferenc International climbed 18.6pc in January-August.
The ministry said Hungary’s tourism sector generates over 10 percent of GDP and provides the livelihoods of 400,000 people.
