money

Breaking: Booking.com receives record fine in Hungary

booking.com tourism accommodation fine

The Hungarian Competition Authority (GVH) has imposed a record fine of HUF 382.5 million (EUR 977,000) on Booking.com for failing to fully comply with its obligations to cease previous legal violations. This conclusion was reached following a recent follow-up investigation. Despite reducing the frequency of certain urgent messages, the company continued to employ psychological pressure tactics on consumers and extended misleading claims about free cancellations until April 2024.

Booking.com’s record fine

booking.com tourism accommodation fine
Booking.com just received a record fine from the Hungarian Competition Authority (GVH). Photo: depositphotos.com

GVH‘s scrutiny of the accommodation website dates back to 2018 when it initiated proceedings against the company for several unfair commercial practices, Index reports. Key findings from the investigation included:

  • Misleading free cancellation promises: Booking.com advertised “free cancellations” for accommodations, but consumers often found that this option was time-limited and more expensive compared to non-refundable bookings.
  • Psychological pressure tactics: The company used urgent notifications that falsely implied high demand and limited availability, thereby pressuring consumers into making quicker decisions. Messages such as “Only one room left” or “Booked 5 times today” were found to create psychological pressure.
  • Inaccurate payment option information: The website failed to clearly present the options for payments using SZÉP cards, a popular benefit card in Hungary.

As a result of these findings, in April 2020, GVH fined Booking.com HUF 2.5 billion (EUR 6.4 million) and mandated that the company cease these practices and provide proof of compliance. Although the accommodation website eventually adjusted its practices to meet GVH’s expectations, these adjustments were delayed, leading to further penalties.

Urgent messages were reduced, but banned messages were still sent

The recent follow-up investigation by GVH revealed that while Booking.com had reduced the use of some urgent messages, it continued to employ messages that were banned, such as “Similar options unavailable” and “Few rooms left for selected dates”.

These messages persisted until 26 February 2024, indicating that Booking.com had not fully abandoned its pressuring tactics. Additionally, the company maintained misleading claims about free cancellations until 26 April 2024 by phasing out cheaper, non-refundable options, disadvantaging Hungarian consumers.

Cheaper options introduced

In the final stages of the investigation, Booking.com modified its commercial practices to align with GVH’s requirements and protect consumer interests. This included reintroducing cheaper, non-refundable accommodation options for Hungarian users.

GVH emphasised that the record HUF 382.5 million fine reflects the seriousness of the violations and serves as a warning to other companies about the importance of full compliance with regulatory obligations. GVH considered that while the accommodation site waived its right to appeal, it did not acknowledge its violations. However, the company did cease the offending practices in the final phase of the investigation.

GVH has stressed that businesses must precisely and completely fulfil the obligations set forth in regulatory decisions. Incomplete compliance or failure to provide proof of compliance can result in substantial fines. Recently, GVH has focused on the online accommodation sector, responding to numerous market signals and complaints, particularly concerning Booking.com’s practices.

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Featured image: depositphotos.com

Tipping in Hungary: Here’s how to make the right decision this summer

tipping in hungary summer restaurant

There is often confusion about tipping in Hungary: whether the now-common service charge (szervizdíj) equates to a tip, and whether it’s necessary or appropriate to leave an additional tip if a service charge is already included.

Tipping in Hungary: Should I? When?

tipping in hungary summer restaurant
Illustration. Photo: depositphotos.com

Various payment methods differ in terms of taxation and voluntariness, Pénzcentrum writes. The Hungarian Competition Authority (Gazdasági Versenyhivatal) advises consumers to consider who they wish to reward with their tip and make decisions accordingly.

Restaurants increasingly list service charges (szervizdíj in Hungarian) on their menus, raising several questions for consumers: is this the same as a tip? Is it mandatory? If a service charge is included, should an additional tip still be given?

A service charge, also known as a serving fee (felszolgálási díj), is a legally defined type of income for hospitality establishments, intended solely for employee wages. This extra charge is shared among all employees according to a pre-determined formula, not just the server.

Service charge

The amount of the service charge is set by the establishment but must be clearly indicated on the menu and other informational materials. Paying the service charge is not optional; it must be paid by the consumer. Its advantage is that, due to favourable taxation, it significantly contributes to fair wages for employees.

Tip

In contrast, a tip is a voluntary payment determined by the consumer. It allows guests to show appreciation and gratitude for the service. However, the method of tipping in Hungary is crucial as it affects taxation and whether the server receives it.

A tip goes directly to the server and is tax-free if:

  • Given directly to the server, separate from the total bill, in cash, or
  • Placed in a designated tip jar, the contents of which are shared among the staff.

A tip is managed by the employer and is subject to tax and social security contributions if:

  • Paid in cash or by card along with the total bill, or
  • Placed in a designated tip jar, the contents of which are distributed by the employer.

These distinctions highlight the important differences between a service charge and a tip. It is crucial to note that tipping in Hungary is always optional, and everyone has the right to decide whether to express their satisfaction in this manner based on their judgment and financial situation.

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Featured image: depositphotos.com

Hungarian government launches ruthless tax panacea to save the yearly budget

forint bank card coin money bond finance interest rate freeze Hungarian government orbán

The Hungarian government has unveiled an adjustment package to address budget deficits. Significantly increased transaction taxes are expected to raise substantial revenue. Who will pay the price of these changes?

Tax panacea to save budget deficit

As Portfolio reports, the Hungarian government’s recent announcement of an adjustment package was inevitable due to budget deficits for both this year and next. A key element of this package is a significant increase in the transaction tax, anticipated to raise almost HUF 100 billion (EUR 254 million) this year and nearly HUF 250 billion (EUR 635 million) next year. While banks collect this tax, the exact distribution of the burden remains unclear.

Despite banks having paid the transaction tax for over a decade, the pass-through mechanism means corporate customers predominantly shoulder the cost, with retail customers contributing less than a quarter of the total revenue. Though there have been occasional suggestions to modify the levy, the Hungarian government remains reluctant to alter this lucrative source of revenue, which continues to generate hundreds of billions annually.

The changes

From 1 August, transactions already subject to the transaction tax will face increased rates: the general levy will rise from 0.3% to 0.45%, with the cap per payment transaction doubling from HUF 10,000 (EUR 25.4) to HUF 20,000 (EUR 50.8). Cash withdrawals will see the tax increase from 0.6% to 0.9%.

Essentially, the normal transaction tax will increase by 50%, while larger transactions will see a 100% increase. Additionally, starting 1 October, transactions involving currency conversion will incur an extra levy, raising the tax from 0.3% to 0.9%, capped at HUF 20,000 (EUR 50.8). Physical currency exchange will also see its tax rate align with the general level of 0.45%.

What does the Hungarian government expect from this?

The Hungarian government anticipates that the general levy increase will generate HUF 85 billion (EUR 216 million) and the additional conversion levy HUF 7 billion (EUR 18 million) in 2024, with the latter expected to reach HUF 30 billion (EUR 76 million) in 2025. Initially projected to bring in HUF 348 billion (EUR 884 million) for 2024, the new measures are expected to boost total revenue to HUF 440 billion (EUR 1,117 million). For 2025, including the increased levies and assuming continued cash flow growth, transaction taxes could yield over HUF 600 billion (EUR 1,524 million).

Should customers fear extra fees?

Some may fear that the banks would try to pay this extra fee by passing it on to customers. However, the government does not allow fee increases to be passed on to residential customers and has banned any increase in fees or discounts in this area until the end of 2024. In addition, banks might pass this fee (or at least some percentage of it) to their corporate clients.

According to 24.hu‘s expectations, the Hungarian government’s announced measures are expected to impact Hungary’s largest listed companies significantly. For MOL, the surplus tax rate will increase from 1% to 2.8% of 2022 revenue. OTP anticipated a gross extra profit tax of HUF 13 billion (EUR 33 million) for 2024, which could have been reduced to HUF 6.5 billion (EUR 17 million) due to increased government bond holdings, but was set at HUF 10 billion (EUR 25 million). However, in 2025, OTP’s extra profit tax could rise to HUF 25 billion (EUR 63 million).

Further tax changes

As ATV reports, Minister of National Economy Márton Nagy announced at a press conference that there would be no air traffic tax next year. At another press conference where he presented proposals to boost the electric car market in Europe, Nagy revealed that starting January 2025, telecoms and pharmaceuticals will no longer have to pay the excess profit tax. However, he justified the continuation of the Hungarian government’s excess profit tax for banks.

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PHOTOS: Hungary issues special collector coins

forint money collector coin central bank

The National Bank of Hungary (NBH) will issue a collector coin marking the start of the Hungarian presidency of the Council of the European Union on 1 July, the bank said on Friday.

Special collector coins in Hungary

The NBH will issue the coin in silver and non-ferrous metal versions with face values of HUF 7,500 and HUF 3,000, respectively.

The obverse of the coin features representations of Hungary’s parliament building, the Tihany Abbey and the Millennium Monument above an abstract, dotted representation of an assembly hall.

The reverse of the coin shows the national coat of arms surrounded by a stylised network of interlocking semi-circles, emblemising diplomatic relations, and twelve stars symbolising the EU.

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The EU reveals when Hungary could join the eurozone

forint euro exchange rate money huf eur eurozone

The European Commission and the European Central Bank have published their latest Convergence Report, evaluating the progress of EU countries outside the eurozone. The report assesses each nation’s readiness to adopt the euro, highlighting their advancements and challenges in meeting the criteria for eurozone membership. According to the latest convergence report, the conditions for euro adoption are not currently met in Hungary.

The Convergence Report

The Convergence Report evaluates the progress of EU Member States outside the euro area, with the exception of Denmark, which has an opt-out. This report, published at least every two years or upon request from a Member State aiming to join the euro area, examines how these countries are meeting the necessary criteria for adopting the euro.

As HVG reports, six EU countries, including Hungary, have been judged in the Convergence Report made by the European Central Bank and the European Commission. The report targeted Bulgaria, the Czech Republic, Hungary, Poland, Romania and Sweden. The results are mixed, but may not be too surprising for most people.

Eurozone enlargement

According to the newest report, out of the six countries mentioned above, Bulgaria is meeting the most criteria. However, the Czech Republic and Sweden are not doing badly either. The same could not be said about Hungary.

To be more exact, there is not a single criterion met by Hungary.

In addition, the willingness to adopt the new currency raises further questions, as the Czech Republic and Sweden are seemingly content with their current currencies.

Hungary does not meet the criteria

According to the Convergence Report, Hungarian inflation remains a significant barrier to joining the eurozone, with an expected benchmark of 3.3 percent contrasted with an annual average of 8.4 percent in May 2024. Additionally, Hungary’s deficit stands at 6.7 percent, well above the expected 3 percent, marking the highest deficit among the assessed countries. Romania closely follows with a deficit just 0.1 percentage point lower, remaining under an excessive deficit procedure since 2020.

The euro adoption criteria also include the long-term interest rate, expected to be 5.5 percent, which only three out of six countries meet. Hungary notably falls short, with a rate of 6.8 percent. Another critical criterion is the quality of governance, a challenging aspect to put into numbers. Only Sweden meets this expectation, while Bulgaria and Hungary face issues due to perceptions of high corruption, causing reluctance among other countries to support their accession.

Strict requirements

ING’s analyst, Péter Virovácz, has told Index that the introduction of the euro has fairly strict requirements. He said, “(…) there is growing debate about the extent to which these requirements actually help to create and put into practice the concept of an optimal currency area.” Since Hungary joined the EU, there have been periods when the country has met all the criteria for joining the eurozone. However, it is all in the past now.

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Surprising: China has become the largest foreign investor in Hungary

Chinese carmaking plant Xi Jinping

Hungary’s largest green-field investments are connected to China that has become the largest foreign investor in the country, a state secretary of the foreign ministry said in Godollo, near Budapest, on Thursday.

Speaking at the Fujian Investment Forum, Levente Magyar said that the visit of a delegation from China’s south-eastern province was “part of an invisible series”.

Chinese ties have a “special role” in Hungary’s foreign policy, as shown by high-level visits such as the one paid by President Xi Jinping earlier and now by the Fujian governor, he said.

China leading communist official
Photo: facebook.com/szijjarto.peter.official

Minister discusses battery recycling with SungEel HiTech executives

National Economy Minister Márton Nagy met executives of South Korea’s SungEel HiTech, a leader in lithium-ion battery recycling, at his office in Budapest on Thursday.

South Korea's SungEel HiTech (Copy)
Photo: FB/SungEel HiTech Hungary

Nagy discussed battery recycling, the situation of the EV battery industry and the green transition with Soo Chul Park, the managing director of SungEel HiTech Europe and SungEel HiTech Hungary, and Dong Wook Chu, the director of SungEel Hitech Hungary. They were joined by Geun Ki Mun, a deputy director at South Korea’s Ministry of Economy and Finance.

SungEel HiTech has nine plants around the world. It has two bases in Hungary where it employs over 200 people.

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PISA 2022 report on young people’s financial literacy released: Hungary ranks average

financial education literacy student pisa

The PISA 2022 report assessing the financial literacy of young people has been released and shows Hungary as ranking among the average of the 14 OECD countries examined, the Education Office (OH) said on Thursday.

PISA 2022 report on financial literacy out

The first large-scale international PISA study assessing the financial skills and knowledge of 15-year-olds was conducted in 2012. Participation is optional and Hungary joined it for the first time in 2022.

The 2022 assessment covered 20 countries including 14 members of the Organisation for Economic Co-operation and Development.

According to the OH, Hungarian students scored 492 points which is close to the average 498-point score of the participating OECD countries. The points Hungarian students scored is, however, above the overall average score of 475 points.

The OH noted that close to 82 percent of 15-year-old Hungarian students had the minimum or higher financial literacy skills expected from a social point of view.

A detailed report on the Hungarian youth’s results is expected to be released in the first half of July.

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Featured image: depositphotos.com

Rental prices in Budapest reach a psychological barrier, contrary trend in other cities

Rent prices in Budapest reached a psychological barrier Budapest's rental market

Rental prices have continued to rise in Budapest, with the average monthly fee now exceeding HUF 250,000 (EUR 630). This represents a psychological barrier for both the capital and Hungary as a whole. Meanwhile, the trend is the opposite in rural cities, where rental prices have decreased following last year’s significant surge.

High rental prices in Budapest*

According to 24.hu, the average monthly rental price for brick apartments in Budapest has grown to HUF 259,000 (EUR 650), marking a 9.9% increase compared to last year. György Kosztolánczy, the CEO of Otthon Centrum, noted that in rural areas, the average rental price has fallen to HUF 160,000 (EUR 400), which is 4.6% lower than in 2023. Last year saw an extraordinary 33% average price rise in rural Hungary.

Renting is most expensive in Budapest’s 6th district, where the average rental price is HUF 339,000 (EUR 860). The 2nd and 5th districts follow, with average rents of HUF 335,000 and 292,000 (EUR 850 and 740) respectively. The 3rd and 11th districts in Buda also feature prominently on the list.

Housing market Rental prices Budapest downtown
Photo: facebook.com/karacsonygergely

On the Pest side, prices are generally lower. The average rental price in the 7th and 8th districts is HUF 225,000 (EUR 570), while the outer districts of Budapest are the cheapest, with prices ranging from HUF 180,000 to 200,000 (EUR 450-500).

Larger apartments more affordable in outer districts

Prices have increased by 5-20% in most districts, with the 11th district in Buda being a notable exception, which is good news for university students.

Unpleasant news for subtenants is that the price rise has been most significant for small, one-room apartments, increasing by 20.9%.

The smaller the flat, the smaller the price differences between districts. For instance, the average rental price for a one-room apartment in the city centre is HUF 180,000, compared to HUF 165,000 (EUR 450 and 420) in the outer districts. This difference becomes more pronounced for two- and three-room apartments.

Downtown of Budapest rental prices
Photo: Daily News Hungary ©

Panel buildings offer cheaper options

The average rent for a three-room apartment in the city centre is HUF 330,000 (EUR 830), compared to just HUF 213,000 (EUR 540) in the outer regions of Pest.

In rural Hungary, some cities are more expensive than others. Debrecen, Győr, and Székesfehérvár, centres of the Hungarian automotive industry, are among the more expensive, with average rents around HUF 200,000 per month. In contrast, Szeged, Pécs, and Kecskemét are much more affordable.

Of course, renting an apartment in panel buildings is cheaper everywhere. In Budapest, average prices range from HUF 180,000 to 200,000 (EUR 450-500). In rural cities, they cost “only” HUF 125,000 to 137,000 per month.

Read also:

  • Renting an apartment in Budapest is almost a luxury: prices approach those in Madrid – Read more HERE
  • Housing market: Foreigners buy up the countryside, rents in Budapest cheapen

Depressing data surfaces about Hungarian wages and GDP

forint money currency Hungarian wages minimum wage

In a recent update of the 2023 consumption data from Eurostat, Hungary has been surpassed by Bulgaria in the per capita consumption ranking. This marks a notable shift in regional economic performance and consumer behaviour, but it is saddening for Hungary. If this was not enough, shocking data also surfaced about Hungarian wages.

Surpassed by Bulgaria

As Portfolio reports, in 2023, Hungarian household consumption was 70% of the EU average, placing Hungary at the bottom of the ranking. Initially, Hungary had a slim 0.1 percentage point lead compared to Bulgaria. However, Eurostat, the statistical office of the European Union, recently revised Bulgaria‘s figure upward to 73%. The substantial revision suggests Bulgaria will likely maintain its advantage in future updates. In addition, Bulgaria’s overtaking of Hungary is not surprising, as the two countries were already close in 2022. Last year, Bulgarian household consumption grew rapidly, while Hungarian consumption declined.

The region’s performance

In the two decades of EU membership, the region has notably caught up, with household consumption drawing significantly closer to the EU average. However, there are some exceptions. Sadly, Hungary has made the least progress, alongside the two most developed countries in the region, Czechia and Slovenia. In addition to consumption data, Eurostat also published GDP per capita revision data, which reveals that Hungary stands at 76% of the EU average. This highlights the same tendency as in consumption numerals; Eastern countries are catching up, while Hungary is lagging.

The low domestic indicator has been extensively evaluated in the past year or two, trying to find factors behind these saddening numbers. Reasons include below-average catching-up rates in the region, low household indebtedness and high savings at the macroeconomic level, and a significant proportion of income allocated to investment rather than consumption.

In addition, the indicator should not be scrutinised too closely due to various measurement challenges. GDP and its components are complex to accurately quantify comparably, and determining relative price levels is also uncertain. Therefore, attention should be directed towards longer-term trends rather than precise numerical values.

Hungarian wages

Portfolio has also revealed shocking data about Hungarian wages. In 2023, findings from the Hungarian Central Statistical Office show a mixed picture of earnings among full-time employees. While average monthly gross earnings increased by 14.2% in nominal terms compared to the previous year, the distribution of these gains varied significantly.

A striking disparity emerged: while 89.1% of full-time workers saw their earnings rise, nearly 60% experienced modest increases in Hungarian wages between 5% and 24.9%. Notably, one in five workers enjoyed substantial raises of 25% or more, with an impressive one in twenty seeing their pay soar by 50% or more. However, despite these individual successes, the data also underscore a challenging reality for many, as 60% of workers faced a decline in real wages amid broader economic fluctuations.

Read also:

Hungary helps Chad where PM Orbán’s only son served

Hungary helps this African country

The Hungary Helps Programme is extending emergency aid to civilians wounded in an explosion of an ammunition depo in N’Djamena in Chad, and to the capital city’s central hospital, it was announced on the programme’s Facebook page on Friday.

In the aftermath of the ammunition depo fire that killed nine and injured another 46 people, Hungary Helps has launched a complex humanitarian aid scheme.

As a first step, staff from the Hungary Helps Agency’s office in Chad and the Hungarian embassy’s head of mission visited the central hospital and granted 35 boxes of medicine compiled on the basis of the hospital director’s request.

The Hungarian government opened a complex humanitarian and development centre in the capital of Chad in January this year with the aim to strengthen the stability of the Sahel.

Read also:

  • Hungarian FM: Hungary, Chad agree on broad cooperation to boost regional stability – Read more HERE
  • Courting Macron? Orbán helps Chad, one of the world’s poorest and least democratic countries

BREAKING: Wizz Air abolishes extra ticket fee – you can travel cheaper!

Wizz Air plane Ukraine All You Can Fly

The Hungarian low-cost airline introduced the so-called system surcharge fee applicable to bookings made by automated systems in the second half of 2022. However, they were unable to create a billing system operating without errors. Therefore, many passengers had to pay the extra fee even though they booked their tickets on the company’s website.

Wizz Air knew about the problem

Utazómajom, a Hungarian travel news media outlet, reported the errors several times to Wizz Air and received a standard answer that the company was working on the solution every time.

Many passengers did not even realise they had paid more than they should have because the system added the so-called system surcharge fee only during the last step of the booking process. According to the company’s website, the cost is EUR 10 per flight and passenger. Utazómajom writes about HUF 8,700 per flight and passenger, which is almost EUR 22.

Anyway, Wizz Air was aware of the problem, and they said they had been working on a solution in the last two years. Passenger comments showed that not everybody got their money back. Some complaints were not satisfied even in months.

Wizz Air Team Hungary
Team Hungary: Wizz Air’s Olympic aircraft. Photo: FB/Budflyer

Radical solution

According to Utazómajom, the number of readers of their relevant article reaches 100 even nowadays, even though they published it in September 2022. The media outlet said that this can be the number of people facing the problem daily.

Utazómajom said they received an utterly different answer from the Hungarian budget airline today. Wizz Air said they switched off the program that added the extra fee even for passengers buying their tickets on their website. Wizz Air apologised for the inconvenience and promised they would refund the money for everybody reporting it to their customer service.

Utazómajom highlighted that the Administration Cost is not the System Surcharge Fee.

Read also:

  • End of Schengen at Hungary’s borders? Here’s Slovenia’s unforeseen decision – Read more HERE
  • Wizz Air launches flights to ‘the heart of Europe’ from Budapest – Details in THIS article

Incredible average gross wage in Hungary

forint huf

Gross wages of full-time employees was 645,300 forints in April, up 13.5 percent year on year, the Central Statistical Office (KSH) said on Friday.

The average net wage was 444,000 in April, the KSH said. Real wages rose by 9.5 percent, calculating with April inflation of 3.7 percent. The gross median wage increased by 16.6 percent to 516,000 forints. The net median wage in Hungary is only HUF 340,700 (EUR 857). That is why many Hungarians choose to leave the country to work for more in Western Europe. They are replaced with guest workers from Ukraine and East Asia. We wrote about their rising number in THIS article.

Commenting on the data, state secretary for employment policy Sándor Czomba said inflation had been curbed by the government’s targeted measures and real wages had been rising for eight months in a row. This, he added, supported the expansion of consumption, boosting economic growth.

Read also:

  • High salaries at Lake Balaton: workers might earn EUR 4,500 over summer – Read more HERE
  • Have the wages of manual workers skyrocketed in Hungary?

Budapest struggling with money problems?

budapest council Karácsony gergely mayor

Budapest’s liquidity is not under threat, Ambrus Kiss, the city’s deputy mayor, said on Thursday.

“Despite reports to the contrary, it’s only the Hungarian government that wants to see a bankruptcy here, but we don’t see it,” Kiss told a press event, adding: “If someone’s bankrupt, how can they charge their account?”

Kiss said the Budapest metropolitan council’s current account was 4.2 billion forints (EUR 10.6m) in the red and had an overdraft limit of 60 billion forints.

The deputy mayor said the account would be in the black if the central government had transferred the funds it had promised for the renovation of Chain Bridge.

Read also:

  • Budapest taxi market disrupted? Uber lures drivers away – Read more HERE
  • One-of-a-kind Budapest sports fest started: the world focuses on us – PHOTOS and more in THIS article

The EU may begin another procedure against Hungary due to overspending

Procedure against Hungary due to overspending

Recommendations of the European semester outline ways to improve the European Union’s resilience and competitiveness, the Trade Commissioner Valdis Dombrovskis said in Brussels on Wednesday.

The country reports published as part of the package review the economic, employment and social developments, and the implementation of the recovery and cohesion programmes, Dombrovskis said.

The recommendations also tackle the most important challenges member states are facing, he said.

In its country report, the EC said Hungary should curb the growth of net expenditures “to put or keep general government debt on a plausibly downward path”, so the general government deficit could converge to 3 percent.

The EC also recommended that Hungary wind down energy support measures before the next heating season, and phase out the remaining price and interest rate caps.

Multiple recommendations

Meanwhile, the government should take measures targeted to improve housing for low-income households, the EC said.

Further, “in light of prolonged delays, [Hungary should] significantly accelerate the implementation of cohesion policy programmes and the recovery and resilience plan, including the REPowerEU chapter, ensuring completion of reforms and investments by August 2026,” the report said.

During the half-time review of cohesion programmes, Hungary should stick to already accepted priorities, and focus on energy poverty and the least developed regions of the country.

The EC also called on Hungary to “improve the regulatory framework and enhance competition in product markets and services by avoiding arbitrary administrative interventions and the selective use of tailor-made legislation providing undue advantage or disadvantage to specific companies, by applying competition scrutiny systematically to business transactions and by reducing the use of emergency measures to what is strictly necessary, in line with the principles of the single market and the rule of law.”

Excessive deficit procedure should be started in the case of 7 member states

Hungary must also improve the “adequacy of the social protection system”, including unemployment benefits; educational attainment levels as well as access to effective active labour market measures, the EC said.

Hungary should also “reduce overall reliance on fossil fuels, accelerate the diversification of gas supply towards non-Russian sources, and take steps to phase out fossil fuel subsidies”, the recommendation said.

The EC has also reviewed 12 member states’ compliance with deficit criteria as laid down in the European treaties, and said an excessive deficit procedure should be started in the case of 7 member states, Belgium, France, Italy, Hungary, Malta, Poland and Slovakia.

In a report prepared on macroeconomic imbalance, the EC said that while most member states returned to a stabler economy, Hungary was still suffering from imbalance.

The EC will now call on the euro group and the European Council to debate and eventually approve the recommendations.

Read also:

  • Hungary’s economy minister admits inability to keep deficit below target by 2024 – Read more HERE
  • Hungary’s budget deficit was shockingly high in 2023 – Details in THIS article

Weaker forint, a struggling economy, long-lasting extra taxes in Hungary?

forint money currency Hungarian wages minimum wage

Fitch Ratings affirmed Hungary’s investment grade sovereign rating after Moody’s and Scope Ratings did alike. However, the American credit rating agency sees significant challenges in Hungary’s economy. One is the Orbán cabinet and its unorthodox economic policies.

Are the Orbán government’s policies a threat? Is a weaker forint coming?

According to portfolio.hu, Fitch Ratings has kept Hungary in the BBB category with negative prospects since January 2023. Based on their analysts, Hungary’s budget deficit will decrease in 2024, but the state debt will increase. They do not expect the Orbán cabinet to revoke the so-called excess profit taxes because the administration needs that money badly for pensions and public services.

Fitch considers the decreasing global demand for batteries a risk. According to their experts, that trend may make economic growth more difficult in 2025-2026. Moreover, they calculate an EU-Hungary clash due to Brussels’ policies concerning the import of Chinese electric cars. For example, the Chinese Polestar will enter the Hungarian market in 2025, based on a recent announcement.

The Hungarian forint we are all proud of. But bad news always hit it hard. Photo: depositphotos.com

According to Fitch, Hungary has negative prospects because of the state budget and the high rate of state debt.

Hungary at EU forefront of economic whitening, says ministry

Hungary is among the European Union countries that have made the most progress in whitening their economy since 2010, the finance minister told a conference on Wednesday, noting that the VAT gap has fallen to 4.4 percent from 22 percent and the rate of tax deductions as a percentage of GDP has decreased to 35 percent from 40 percent.

Hungary’s government overhauled the tax system in 2010, shifting the emphasis from taxes on labour to consumption taxes, Mihály Varga said on the opening day of the General Assembly of the Intra-European Organisation of Tax Administrations (IOTA) in Budapest.

The highest personal income tax rate has fallen to 15 percent from 36 percent since 2010, while the corporate tax rate has been cut from 20 percent to 9 percent, the lowest in the EU, Varga said. Meanwhile, payroll taxes have been slashed from 33.5 percent to 13 percent, he added.

It was thanks to these measures, Varga said, that Hungary ranks 11th out of the 38 OECD countries. The presidency of the IOTA in the year-long cycle ending on July 1, 2024 was held by Ferenc Vágújhelyi, head of national tax and customs authority NAV.

Read also:

  • As expected: Hungarian central bank has put on the brakes – Read more HERE
  • Filipino guest workers in Hungary may far exceed government claims

Beaches at Lake Balaton: Entrance ticket prices increased by 50% in some places

Lake Balaton beach outdoor pools

Summer is officially here, making holiday planning essential. When choosing the perfect destination, finances play a significant role. Previously, we discussed the cost of food and drinks at Lake Balaton. Now, we are examining beach entrance fees at the “Hungarian Sea” and comparing them to the 2023 prices.

Prices at Lake Balaton

According to Pénzcentrum, beach ticket prices at Lake Balaton have generally increased. However, the extent of this price hike varies significantly across different locations. It is common for beaches to raise prices by a few hundred forints, but in some cases, the price difference is around 50 percent compared to 2023. Let’s review the popular Lake Balaton destinations one by one.

Balatonvilágos

The Mayor of Balatonvilágos, Károly Béla Takács, has provided updated information on the prices for the municipal beaches in Balatonvilágos. At the Municipal Paying Beach on Zrínyi Avenue, daily tickets are priced at HUF 1,200 (EUR 3.01) for adults, HUF 1,000 (EUR 2.51) for pensioners and students, and HUF 800 (EUR 2.01) for children aged 3–6 years. A family ticket for two adults and two children under 14 costs HUF 3,500 (EUR 8.79).

From 5 p.m., all tickets are half-price. Residents can use the beach for free with proof of address and photo ID. Notably, the adult entrance fee has increased by 50 percent from last year, when it was HUF 800 (EUR 2.01). Additionally, the beach has been renovated for the new season. However, there is a municipal beach that remains free of charge.

Balatonfüred

In 2023, Esterházy Strand’s entrance fee was HUF 2,100 (EUR 5.27), which rose by HUF 150 (EUR 0.38) this year, resulting in a 7 percent increase. Meanwhile, Kisfaludy Strand’s fee increased by HUF 200 (EUR 0.50), an 11 percent rise. Esterházy Strand is building a multifunctional cabin with bathrooms, a baby-mama room, and guest cabins. Kisfaludy Strand has renovated its pergola, outdoor changing rooms and promenade area. Both beaches have improved their green area irrigation, installed eco-friendly robotic lawnmowers and renovated playgrounds.

Szántód

In Szántód, Lake Balaton beach fees remain unchanged for 2024: HUF 1,500 (EUR 3.77) for adults and HUF 500 (EUR 1.26) for children aged 3 to 18 between 9 a.m. and 7 p.m. There are no other discounts, but residents can use the beach for free, and holiday homeowners can buy discounted seasonal tickets.

Balatonszárszó

The entrance fees for the central beach in Balatonszárszó have not increased in 2024: adult tickets are HUF 1,300 (EUR 3.26), children’s and pensioner’s tickets are HUF 700 (EUR 1.76), and family tickets are HUF 3,200 (EUR 8.03). Additionally, Balatonszárszó has two free beaches. Moreover, parking is free throughout the town.

Balatonszemes

In Balatonszemes, all three beaches remain free. In recent years, modernisation and improvement have been prioritised to make these beaches more appealing to visitors.

Siófok

The season at Siófok’s main beach runs from 15 June to 1 September, with unchanged entrance fees: HUF 2,500 (EUR 6.28) for adults, HUF 2,000 (EUR 5.02) for Siófok residents, HUF 800 (EUR 2.01) for children and HUF 1,500 (EUR 3.77) for students.

Gyenesdiás

In Gyenesdiás, adult admission on weekdays is HUF 150 (EUR 0.38) and on weekends HUF 1,700 (EUR 4.27). A family ticket on weekdays is HUF 3,500 (EUR 8.79), while on weekends it is HUF 4,200 (EUR 10.55). A ticket for children on weekdays is HUF 1,100 (EUR 2.76) and on weekends HUF 1,200 (EUR 3.01). Student and pensioner tickets are HUF 1,100 (EUR 2.76) on weekdays and HUF 1,200 (EUR 3.01) on weekends. Adult admission increased by HUF 200 (EUR 0.50) compared to 2023.

Fonyód

In Fonyód, prices remain unchanged: HUF 950 (EUR 2.38) for an adult ticket, HUF 480 (EUR 1.20) for a pensioner and a student ticket, and HUF 2,400 (EUR 6.02) for a family ticket (2 adults and 2 children).

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Burger for EUR 9, lángos for EUR 5: the Hungarian reality this summer

beach food burger lángos

This year, street food at festivals and beach buffets is likely to increase in price by 8-10%. While this increase might not sound too severe, a hamburger will still cost around HUF 3,500 (EUR 8.8) in the summer, and a lángos with cheese and cream toppings can be close to HUF 2,000 (EUR 5) in many places.

Burger, lángos and other beach foods to increase in price

beach food burger lángos
Photo: depositphotos.com

The holiday and festival season has begun in Hungary. Due to the record-high inflation of the last two years, people continue to spend cautiously at beach bars and even at the larger festival venues, Portfolio writes.

“It can be scary to buy a burger at a street food cart for HUF 3,500 (EUR 8.8), but the truth is that our costs have risen so much in recent years that even a price of HUF 5,000 (EUR 12.56) would not be too much,” Zoltán Horváth, president of the Hungarian Street Food Association, told Portfolio.

He pointed out that the price of raw materials has doubled in recent years, and that labour costs have risen, while energy prices and festival rents have increased. Prices will not increase significantly this year, he stressed. While people used to buy 2 or 3 things at the festival buffets, now they buy only one.

“Even a 20% increase would be justified”

“They try to persuade people to consume by offering better prices on a product. For example, many caterers have a HUF 2500 (EUR 6.3) product, which can be cheaper if it contains less meat, or if it doesn’t contain duck, but chicken. And if the customer is already standing in front of the street food trolley, it’s easier to consume more,” said Horváth.

“A 20% price increase would be justified at events or beach buffets, but this year there will probably only be an 8-10% increase, and entrepreneurs are afraid to raise prices more than that for fear of losing guests,” said László Kovács, president of the Hungarian Caterers’ Association.

Regardless of this, it is likely that a cheese and cream lángos will cost HUF 1800 or a hamburger HUF 3500, he added.

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In two weeks, Hungary bagged three favourable credit rating agency decisions

rating agency fitch ratings hungary

Fitch Ratings has affirmed Hungary’s investment grade sovereign rating after Moody’s and Scope Ratings did the same, Finance Minister Mihály Varga said in a post on Facebook late Friday.

Varga said Fitch expected the Hungarian economy to grow at an accelerated pace this year and next. All forecasts point to the country being a frontrunner in the growth ranking in the coming year, he added.

“In its assessment, Fitch notes the stability of the banking sector, the improvement in our external position and the strong labour market as positive factors,” Varga said.

His announcement on Facebook:

Fitch’s experts expect the government to continue reducing the budget deficit and public debt levels in the long term, while inflation remains low, he added.

“Despite the war raging in neighbouring Ukraine and the weakening of the European Union economy, all three big credit rating agencies continue to put Hungary in the investment grade category. That means Hungary is two notches higher than at the beginning of the last decade,” Varga said.

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