money

The biggest increase in real estate prices happened in these Hungarian towns

Spontaneous euroisation Budapest rent prices property market prices exceeded property in hungary renting in Hungary news rental

In its latest analysis, money.hu has compiled a top 10 list of the most dynamically rising Hungarian towns in the last 5 years. The top list, compiled using data from ingatlan.com, includes several settlements in Baranya and Borsod-Abaúj-Zemplén counties. The experts also discussed how the development of lending rates has affected property prices.

Real estate trends

Trends in the real estate market over the past 5 years show that property prices have not risen fastest in the most up-and-coming and expensive areas, but rather in developing regions. Property prices in the top 10 most expensive municipalities have increased five to six times. The trends may even be interesting from an investor’s point of view, as the increase in property values in some developing rural municipalities can be of considerable benefit to those who have a good appreciation of the likely development of the property market in the area. And local property owners may find themselves in the favourable position of seeing their wealth increase significantly through the homes they own.

The following towns have shown the highest house price growth in the last 5 years.

City	County	Price per m² (thousand HUF) May 2019	Price per m² (thousand HUF) May 2024	Change (%)
Zalaszentmihály	Zala	70	441	530%
Bogád	Baranya	150	940	527%
Ferencszállás	Csongrád-Csanád	56	348	521%
Mezőszentgyörgy	Fejér	63	356	465%
Ónod	Borsod-Abaúj-Zemplén	59	321	444%
Adács	Heves	84	449	435%
Kóny	Győr-Moson-Sopron	94	499	431%
Magyarszék	Baranya	74	364	392%
Bodrogkisfalud	Borsod-Abaúj-Zemplén	64	314	391%
Szigetbecse	Pest	166	799	381%
source of data: ingatlan.com

What might be behind the boom in the property market in a particular region?

Favourable developments in the local labour market, for example, due to new investment, relative wage growth and population growth, all have an impact on house prices in a given area. These factors should be taken into account when considering where to consider buying a home as an investment. “It would not be surprising if in five years’ time the municipalities of Hajdú-Bihar, Csongrád-Csanád and Zala – and even Borsod-Abaúj-Zemplén – were among the most appreciating regions in terms of real estate. It is quite certain that the significant investments announced in recent months will stimulate property buying and may also increase the value of property in the municipalities concerned,” – said László Balogh, lead analyst of ingatlan.com.

Of course, individual house prices can also be influenced by a number of different things, such as the quality of the property, the number of rooms and bathrooms, the distance to schools and kindergartens, the accessibility of shopping centres and public transport, and the characteristics of the local area.

The money.hu experts have also highlighted that a developing region or municipality can already be on the radar of banks. Rising property prices are providing credit institutions with more collateral, making them more willing to lend and relaxing their pre-set conditions.

“There are clear signs of improving housing market developments from end-2023: historically high employment, rising real wages and consumer confidence, and a more favourable interest environment. In the property market, there is generally a strong correlation between interest rates and house prices. When market interest rates are more favourable, the housing market experiences higher demand, which typically pushes up house prices. This is supported by the latest housing price index from May from ingatlan.com, which shows that the pace of house price increases has become more dynamic, but there can be significant differences between regions according to the price index, which shows the up-to-date price trends,” – said Levente Korponai, head of money.hu.

Read also:

June 14, 2024

Vodafone receives gigantic fine in Hungary

Vodafone Hungary service provider telecom

The Hungarian Competition Authority (Gazdasági Versenyhivatal, GVH) has imposed a HUF 120 million (EUR 302,000) fine on Vodafone Hungary.

Vodafone’s fine

Vodafone Hungary service provider — Source: Daily News Hungary

The Hungarian Competition Authority (GVH) has ordered Vodafone Hungary Plc. to pay a HUF 120 million (EUR 302,000) fine. The news was announced on the website of the Budapest Stock Exchange on Thursday afternoon by Antenna Hungária Plc.’s parent company, 4iG Plc. (the latter is owned by the state).

The Competition Authority fined Vodafone for an infringement committed in 2022, during the period of its previous ownership. This was because Vodafone had failed to provide proof of compliance with the obligations to be fulfilled in 2022, as required by a previous GVH decision, by the deadline, and the late submission of proofs did not allow to establish that one of the obligations had been fulfilled in the required terms, content and timeframe, Világgazdaság reports.

Read also:

June 13, 2024

Are eateries and ice cream shops at Lake Balaton trying their best to keep prices low?

As summer heats up, ice cream lovers may find their favourite treat becoming more expensive by Lake Balaton. Analysts at the Oeconomus Economic Research Foundation have indicated that ice cream prices are projected to rise by 10-15 percent this year compared to last. Despite these increases, many vendors are striving to keep their prices within a range acceptable to their customers.

Ingredients still face a price hike

As Economx reports, Bence Jóna, an analyst at the Oeconomus Economic Research Foundation, highlighted significant price increases for sugar and cocoa in April, with year-on-year rises of 30.4% and 9.2%, respectively. While global food prices started to decline from the second half of 2022 onwards, sugar prices have only recently started to moderate.

This trend is mirrored in Hungary, where flour and dairy product prices have decreased, but sugar continues to rise sharply. The global market’s downward trend cannot be felt in Hungary yet, thus making it impossible for domestic ice cream makers to keep their prices unchanged.

Trying to keep prices reasonable

Besides changes in raw material prices, other factors such as higher operating costs (overheads, rent) and increasing wages due to labour shortages could lead to price hikes in ice cream shops and beach food eateries. Although these pressures have slightly eased compared to 2023, businesses often cannot pass on these costs to customers due to price sensitivity. Thus, beyond a certain price point, demand would significantly drop. Experts advise business owners to raise their prices reasonably to avoid scaring away customers.

Ice cream and lángos prices at Lake Balaton

Last year, the price of a scoop of ice cream in Hungary ranged between HUF 440 (EUR 1.13) and HUF 520 (EUR 1.33), but this year it is expected to rise by 10-15 percent, reaching HUF 500-600 (EUR 1.28-1.54), and HUF 600-650 (EUR 1.54-1.66) in more touristy locations.

Another popular Hungarian beach delicacy, lángos, also faces a price hike. This year, prices are expected to rise by 8-10 percent, which is not so bad compared to last year’s 20-40 percent. While the cost of a lángos is heavily based on the toppings, we can safely say that we cannot find a plain lángos for under HUF 1000 (EUR 2.56).

Balaton lángos Hungary tourism — https://www.facebook.com/Balaton-%C3%A9s-L%C3%A1ngos

Are Hungarian prices considered low?

While ice cream in Hungary is predicted to be 10-15 percent more expensive this season at Lake Balaton, the prices are still considered low in an international context. A recent survey shows that Turkish beaches offer the cheapest ice cream, for about HUF 44 (EUR 0.11) per scoop. French beaches are at the other end of the scale with one scoop for approximately HUF 1800 (EUR 4.61).

Read also:

June 13, 2024

Government spokesperson: Investments worth EUR 780 million opened in past two weeks in Hungary

Over the past two weeks, 310 billion forints (EUR 780m) worth of investments, supported with government funds, were opened in Hungary, the government spokesperson said on Thursday.

new danube bridge pál tomori — The bridge connecting Kalocsa and Paks. The 946-metre-long, two-lane crossing is named after Pál Tomori. Photo: MTI/Máthé Zoltán

Eszter Vitályos told a regular press briefing that out of 84 large projects, 125 billion forints were spent on public road infrastructure development, including 116 billion forints on a bridge spanning the Danube between Kalocsa and Paks and 2.5 billion forints for an M1 motorway exit at Páty.

Regarding health care, she highlighted Pécs University’s new emergency medical centre for children which received 2.7 billion forints in government support.

A total of 14 billion forints worth of investments were carried out in culture and public education, including 12 billion forints for the revamp of a Tisza castle in Geszt.

She added that a tourism development project has been completed in the Szolnok castle and a 700 metre long bridge dubbed the bridge of national cohesion was opened in Sátoraljaújhely.

Read also:

June 13, 2024

Appalling: Chinese company fined in Hungary, decision only published after elections

A Chinese company near Debrecen in Hungary has been fined for environmental pollution: however, the decision was only published after the 9 June elections.

Chinese company fined

The Hajdú-Bihar County Government Office published the decision to fine the Chinese car company Halms after a delay of three weeks. The company was fined HUF 1.98 million (EUR 5,012) for violating waste management rules, 24.hu reported.

The company was fined because it secretly discharged polluted water from its site near Debrecen into the Kisgugyori canal. The government office decided on the fine on 22 May but only published the decision after the municipal elections.

In January, the authority carried out an unannounced inspection of the premises of Halms Ltd. The inspectors noticed that an unknown, white-coloured substance was leaking into the Kisgugyori canal, a natural drainage channel in the area. They found that the contaminated water was coming from the Chinese company’s site.

According to the decision, the company was prosecuted and ordered to “remedy the unlawful situation caused by the pollutant leaking into the sewer”.

The company received huge government support

Halms, a Chinese company, invested EUR 43 million in the first phase of the construction of the parts plant, for which the Hungarian government provided around HUF 1.5 billion (EUR 3.8 million) in funding.

Over the past year and a half, civil protests have been launched in Debrecen and the surrounding municipalities over the battery industry investments. Some surveys have suggested that this is adversely affecting support for the Fidesz leadership. Sunday’s municipal elections did not prove this to be the case, with László Papp easily retaining his mayoral seat with almost 50% of the vote.

Read also:

June 12, 2024

Hungarian forint falls sharply as Eurozone political crisis unfolds

forint euro exchange rate money huf eur eurozone

Last Sunday’s European Parliament election led to varying degrees of political turmoil in Western Europe, with markets reacting swiftly to perceived threats. The euro plunged, but the Hungarian forint fell even more significantly, painting a bleak picture for both currencies.

The latest election results have already dealt a severe blow to the euro and European stock markets. The deep dive might not be short-lived, as neither markets nor analysts were prepared for the surge of the far-right, despite prior indications.

Analysts’ notes released since the election paint an increasingly grim outlook for the euro. The consensus is that the growing political extremism could fundamentally shake confidence in European markets, leading to asset devaluation, as reported by Bloomberg.

European Parliamentary elections shake the market

eur/huf exchange rate coins — Photo: Pixabay

This process has already started. In response to the poor election results, French President Macron dissolved the parliament and called for early elections. The Belgian Prime Minister resigned, and the German governing coalition achieved its worst-ever results. Consequently, the euro dropped by 0.5% to a one-month low against the dollar, and Western European stock markets opened the first post-election working day with significant losses.

Analysts highlight that alongside uncertainty, volatility is likely to return, putting pressure on the euro’s market. The euro hasn’t been without stress lately either. Stronger-than-expected U.S. labour market data on Friday altered expectations for the Federal Reserve’s interest rate path, leading markets to price in only one rate cut instead of two.

This could result in a persistently high base rate and a robust dollar, which would be painful for the euro. The far-right’s advance in the European Parliament raises questions about Macron’s ability to implement his economic policies in a divided parliament and the feasibility of further fiscal policy convergence among member states.

Moreover, the German governing coalition’s setback, which oversees Europe’s largest and currently struggling economy, adds to the euro’s woes.

Hungarian forint falls more sharply

forint euro exchange rate money huf eur — Photo: depositphotos.com

The Hungarian forint has fallen even more sharply than the euro in recent hours/days, despite no significant far-right surge domestically, Világgazdaság reports. However, the Tisza Party’s seven seats were a surprise on the international stage.

The forint’s decline appears to be more influenced by the dollar’s broad and prospective strengthening and Monday morning’s inflation data. May’s inflation came in at 4%, below the expected 4.2%, suggesting that the Hungarian National Bank has room to cut interest rates further, potentially weakening the forint. By 11:30 AM, the forint had dropped 0.5% to 393.4 against the euro.

There will be more excitement for the forint market this week beyond the election results. The Federal Reserve’s decision on Wednesday regarding the U.S. base rate is crucial. While markets are confident there won’t be a cut for some time, the Fed’s communication will significantly impact the forint’s near-term trajectory.

Read also:

Featured image: depositphotos.com

June 11, 2024

Long-awaited Wizz Air innovation: you can now pay on board with this popular credit card!

Wizz Air, the Hungarian low-cost airline, has announced a big change. You can now pay with your Revolut card on Wizz flights.

Fintech expert Ádám Kovács shared on Revb.hu that a member of the Revolut community group was travelling on a Wizz Air flight to Dortmund on 6 June, and during boarding, the crew specifically highlighted that they accept Revolut cards on board. So far, this has not been the case.

Until now, prepaid cards, such as Revolut and other fintech companies, have not been accepted for on-board payments.

Wizz Air now accepts Revolut cards on board

revolut card payment — Photo: depositphotos.com

Kovács checked with Wizz, who confirmed that they would indeed allow Revolut cards for in-flight payments for a trial period. They added that they would monitor the results and adjust their business strategy accordingly, Forbes reports.

It is not known exactly how long the trial period will last, nor what will determine whether this option will be retained in the future. However, it is certain that all Wizz flights will be affected.

Are you happy with this change? Let us know in the comments!

Read also:

Featured image: depositphotos.com

June 7, 2024

Wizz Air launches new flight to German city, may receive giant fine from Spain

Wizz Air launches new flight to German city Stuttgart

Wizz Air, Hungary’s budget airline, launched its brand new flight to Stuttgart, commuting five times a week. Meanwhile, they may get an incredible fine in Spain for their luggage policies.

New Wizz Air flight to German city

According to Budflyer, a Hungarian aviation news Facebook page, the first Wizz Air flight took off from Budapest Airport to Stuttgart, Germany. The flight will carry passengers five times a week: Tuesday, Wednesday, Thursday, Saturday and Sunday. Such flights are crucial because tens of thousands of Hungarians work in Germany, and they regularly come back to visit family or do official business.

According to the German Statistical Office (Destatis), more than 210 thousand Hungarian nationals lived in Germany in December 2023. That is a 3,230 decrease compared to 2022, but still very high.

Spain may fine Wizz Air for millions of euro

Spain’s social affairs ministry fined four budget airlines. One of the reasons for the brutal 150-million-euro fine is that the airlines should enable passengers to bring trolley bags on board for free. Based on Okosutas, such a measure would make boarding longer and plane circulation more difficult. Furthermore, it would increase the aircraft’s weight due to the many bags, which will impact its emission.

Okosutas argues that budget airlines introduced the payable trolley bag scheme in the 2010s to decrease ticket costs. That is because those who do not carry large bags on their journey can travel cheaply. For example, with Wizz Air, one carry-on bag (max 10 kg and 40 x 30 x 20 cm) is free, which is enough for half the passengers. Other budget airlines have similar regulations concerning luggage.

Four airlines were fined 150 million euros: Ryanair, Easyjet, Vueling, and Volotea. Wizz Air and Norwegian are also present in the Spanish market, but they did not receive a fine in this round. Okosutas wrote that all low-cost air travel sector functions follow the free carry-on and payable trolley bag rule. If that changes, plane ticket prices will increase. The airlines concerned did not accept the Spanish decision, they appealed to local courts.

Internationally renowned street artist’s work decorates the passenger pier at Budapest Airport

According to Budapest Airport, “passenger pier at Terminal 2 is adorned with the artwork of internationally renowned street artist Gergely Void, created in collaboration with children living in state care. With the purchase of the painting, Budapest Airport Plc. supported the Foundation for Children in State Care (Világszép Alapítvány), which helps young people living in children’s homes in Hungary, and Unicef Hungary”.

Read also:

Mesmerising Wizz Air plane connects Budapest with Paris, CEO may get historic £100M bonus – Read more HERE
Hungarian Wizz Air landed in India for the first time

June 2, 2024

Hungary launches new research grant programme

Researchers Scientists Research Science Laboratory

The government is launching a 6 billion forint Research Grant Hungary programme to motivate foreign and Hungarian science researchers working abroad to implement their projects in Hungary, Janos Csák, the minister for culture and innovation, said on Friday.

Research Grant Hungary’s forerunner was the HUN-REN scheme, a recruitment programme that has already brought seven successful foreign researchers to Hungary, he noted. The goal is for there to be 9,000 researchers per one million people and for Hungary to enter the top ten most innovative EU countries by 2030, Csák added.

Read also:

Hungarian government to provide EUR 6.4m in support for educational farms – Read more HERE

June 1, 2024

Unprecedented: Orbán government can raise teachers’ wages only if the EU pays it?

Hungary has received a total 184 billion forints (EUR 478m) worth of EU funding to be used for a pay hike for kindergarten and school teachers, the finance minister said on Wednesday. Orbán cabinet can raise wages in education if the EU pays it?

Mihály Varga said 340 billion forints from central coffers had been used for the same purpose at the beginning of this year. Since last December, Brussels has released a total of 734 billion forints worth of funds withheld from Hungary before, Varga said on Facebook.

The Hungarian government has been widely criticized for not raising teachers’ wages from the state budget. Critics highlighted a government that cannot pay enough for their teachers should resign. Criticism added that the Orbán cabinet would buy the Budapest Airport instead of settling the severe financial problems of public education.

The Orbán cabinet regularly repeated there was not enough money to increase teachers’ wages. Only by using EU funds can they do so, which were frozen by the European Commission due to rule of law concerns. Furthermore, the Orbán cabinet is conducting a European parliamentary election campaign stating that the current leaders of the EU want to escalate the war in Ukraine while Hungary is interested in peace.

Read also:

Troubling: teachers are disappearing from Hungary – Read more HERE
Everything you should know about school holidays, important dates in Hungary

Featured image: teachers’ demonstration for higher wages. The banner says “There is no future without teachers”

May 29, 2024

Lake Velence vs Lake Balaton: Horrendous prices at popular Hungarian vacation resort

For a number of years now, tourists have been faced with extremely high prices around Lake Balaton. Unfortunately, this year is no different on Lake Velence: buffet prices have reached incredible levels. Here’s what to expect if you want to holiday on Lake Velence in 2024.

Sky-high prices at the Hungarian sea

lake balaton property real estate (1) — Lake Balaton. Source: depositphotos.com

As reported by Daily News Hungary in mid-May, those who want to eat lángos at Lake Balaton this year may face high prices. To clarify, Hungarian lángos is made from a simple dough consisting of flour, water, yeast, and salt, which is deep-fried until golden and crispy, then topped with several savoury toppings, such as garlic, sour cream, grated cheese, and sometimes even sweet toppings such as jam or Nutella.

As we wrote in the article, visitors to the “Hungarian sea” should expect a nearly 10% hike in prices compared to last year’s already high rates. Lake Velence is a great alternative to Lake Balaton, as it’s generally a bit less crowded, and usually a bit cheaper too: however, it might not be the case this year.

Prices at Lake Velence

According to reports from Pénzcentrum readers, tourists on holiday at Lake Velence should also be prepared for high food prices. Here are some examples:

Fish

freshly fried catfish costs HUF 890/10 dkg (EUR 2.30);
hake and bream cost HUF 790/10dkg (EUR 2.05);
pikeperch costs HUF 1490/10dkg (EUR 3.87).

According to Pénzcentrum, these prices are roughly in line with those at Lake Balaton. Wanna eat something else? Find further examples below:

Main courses

carp fish soup costs HUF 2690 (EUR 6.98);
fried chicken breast or fried cheese with hash browns cost HUF 3490 (EUR 9.06);
fried sausage costs HUF 1190/10 dkg (EUR 3.09);
hot-dog costs HUF 900 (EUR 2.34);
hamburger costs range between HUF 1290 and 1490 (EUR 3.35 and 3.87) depending on the extras.

One plain lángos is HUF 890 (EUR 2.30), one lángos with cheese is HUF 1250 (EUR 3.24), one cheese and cream lángos is HUF 1550 (EUR 4), and one lángos with dill and sheep’s cottage cheese is HUF 1500 (EUR 3.89).

Price of drinks and ice cream

According to Pénzcentrum, a pint of beer costs between HUF 790 and 1490 (EUR 2.05 and 3.87), a coffee HUF 550-650 (EUR 1.43-1.69), half a litre of coke HUF 700 (EUR 1.82). Ice cream prices are particularly high: a small portion costs HUF 850 (EUR 2.21) and a large portion HUF 1350 (EUR 3.50) on the shores of Lake Velence.

Along with lángos and beer, pancakes are another top product on the beaches. At Lake Velence, the price of HUF 350-450 (EUR 0.91-1.17) doesn’t seem like much, although you never eat just one. They are slightly more expensive on the shores of Lake Balaton, between HUF 400 and 500 (EUR 1.05 and 1.30).

Read also:

May 27, 2024

No stopping: Hungarian forint at a several-month high

The Hungarian forint continues its impressive ascent, hitting multi-month highs against both the euro and the dollar. This surge is particularly noteworthy against the American currency.

On 24 May, the forint held onto its remarkable gains, showing no signs of losing steam. The day began with the forint trading at 386.3 to the euro and 357.32 to the dollar. By just after 8 PM, it had strengthened to 383.95 against the euro and 353.72 against the dollar, marking gains of 0.63% and 0.99% respectively, Világgazdaság reports.

What’s the reason behind the strengthening?

The exact catalyst for the forint’s dramatic rise is unclear, given the absence of significant macroeconomic data from either Hungary or the US on Friday. However, it appears that even minor economic indicators were enough to fuel substantial market movements.

Notably, the forint wasn’t the only currency making waves. The euro also posted a 0.4% gain against the dollar. One possible factor behind the forint’s strength is Friday’s report from Hungary’s Central Statistical Office (KSH), revealing a lower-than-expected unemployment rate of 4.4% in April. According to our article published on Friday, in absolute terms, there were 217,300 unemployed in April (which was still 100 more than in March and 27,200 more than twelve months earlier).

This lower rate suggests underlying strength in the economy, which could temper expectations for the Hungarian National Bank’s (MNB) planned rate cuts this summer. An overheating economy risks inflation, something the central bank will likely strive to prevent, according to Világgazdaság.

Forint at several-month high

forint money currency — Source: depositphotos.com

Interestingly, Friday’s labour market data may primarily influence the MNB’s interest rate decisions after June. Deputy Governor Barnabás Virág mentioned at a Tuesday press conference that a rate cut might still happen in June, but thereafter, the central bank’s room for manoeuvre would narrow. Analysts point out that currency markets often price in changes well in advance, sometimes looking as far as a year ahead.

The last time the Hungarian currency was this strong against the euro was on 5th February, marking a notable milestone in its recent performance.

However, as we wrote in THIS article, despite the central bank’s cautious stance, analysts predict that the euro could exceed the HUF 400 mark by the end of the year. The consensus forecast suggests that the euro exchange rate will fluctuate between 383 and 409 HUF, with many predictions leaning towards breaching the 400 mark.

Read also:

May 26, 2024

Orbán: Brussels shot us in the back

Hungarian Foreign minister about Orbán Viktor

Prime Minister Viktor Orbán said on Friday that the European Court had made “an outrageous decision” making Hungary pay a daily fine worth around 6 million forints (EUR 15,000) to Brussels just because it refused to accept migrants.

Orbán told public radio that it was more than shocking and “absolute nonsense” that while Hungary was protecting Europe, spending several billion euros on border protection, it was “shot in the back from Brussels”.

“The only answer to that is that we must send away the European leaders who make such decisions,” the PM said.

Read also:

May 24, 2024

Hungary accumulates budget deficit higher than planned for the year by the end of April

Hungary’s cash flow-based budget, excluding local councils, posted a deficit of 2,597.5 billion forints (EUR 6.7bn) at the end of April, the finance ministry confirmed in a detailed release of data on Thursday.

Hungary accumulates huge budget deficit

The central budget had a deficit of 2,590.6 billion forints and the social security funds were 103.3 billion forints in the red but separate state funds were 96.4 billion forints in the black.

Interest expenditures, which included large payments on retail government securities, came to 1,507.8 billion forints in January-April, up 632.4 billion from the same period a year earlier, the ministry said.

Spending on maintaining the regulated utilities price system for households reached 540.0 billion forints, the ministry said.

Spending on pensions reached 2,371.7 billion forints, while health-care expenditures came to 872.9 billion forints.

Read also:

May 23, 2024

Massive debt: Hungarian Embassy owes millions of pounds to London

Between 2003 and 2023, the Hungarian Embassy in London accumulated more than HUF 625 million (EUR 1.6 million, GBP 1.37 million) in unpaid congestion charges to the city.

Since the introduction of the London congestion charge in 2003, the Hungarian Embassy has accumulated a considerable amount of unpaid fees. The British capital now wants to recover HUF 625 million, hvg.hu reports.

In a press release, Transport for London (TfL), the local authority responsible for transport in the British capital, also published a “list of shame”. According to the list, the United States owes the most money: however, the Hungarian embassy is also in the middle of the “ranking”.

Budapest owes millions to London

london traffic — The Hungarian Embassy in London owes millions of pounds to the British capital. Photo: depositphotos.com

According to TfL, between 2003 and 2023, the Hungarian Embassy in London owed them GBP 1,374,870, or more than HUF 625 million, because they have not paid a penny for using the toll road network since the introduction of congestion charging in 2003.

The organisation argues that the congestion charge is not a tax, but a fee for a service, and therefore diplomats are not exempt from it.

TfL says that the majority of embassies are paying the tolls properly, but there is a “stubborn minority” who refuse to pay. Accordingly, GBP 143,527,113, or more than HUF 65 billion, would now be collected from the various embassies, citing congestion charges that have accumulated over nearly 20 years.

Read also:

May 23, 2024

Hungarian economy minister Nagy calls for maintaining voluntary rate cap on retail credit until June 30

Márton Nagy, the national economy minister, on Tuesday met Radován Jelasity, chairman of the Hungarian Banking Association, to review macroeconomic and lending trends, his ministry said in a statement.

Nagy and Jelasity concluded that having pushed down inflation, the government had successfully restarted economic growth this year and had every chance of boosting it next year. Economic growth is expected to reach 2.5 percent this year before rising to 4.1 percent in 2025 on the back of rising investments, steady exports, growing labour-market activity and dynamic real wage growth, they said.

Lending trends, they said, had also taken a positive turn recently. The two officials reviewed a voluntary scheme under which lenders agreed to reduce their spreads on corporate credit over the benchmark three-month Budapest Interbank Offered Rate (BUBOR) to 0 percent from February 1 to May 1.

At the meeting Nagy asked that, in the interest of protecting families and boosting lending, banks maintain the voluntary 7.3 percent cap on home loan APRs in effect until June 30 in spite of the recent increase in yields.

Read also:

May 22, 2024

Possible 400 EUR/HUF exchange rate amid Hungarian central bank decisions

Will we see a 400 EUR/HUF exchange rate again this year? The Hungarian National Bank (Magyar Nemzeti Bank, MNB) is anticipated to continue its trend of monetary easing with a 50 basis point interest rate cut at its meeting tomorrow. This would lower the benchmark rate to 7.25%. However, according to economists consulted by Portfolio, this aggressive easing phase is approaching its conclusion. Despite the central bank’s cautious stance, analysts predict that the euro could exceed the HUF 400 mark by the end of the year.

Barnabás Virág, the MNB Vice President, told Portfolio last week that the base rate could settle around 6.75-7% by mid-year. This view is shared by market participants, who expect an imminent 50 basis point cut followed by a similar reduction in June. This would align the base rate with the mid-year target of 6.75%.

The consensus is clear: an immediate 50 basis point cut is anticipated, with most expecting a similar decision in June, although a minority predicts a smaller, 25 basis point reduction. This pattern indicates a shift towards a more conservative approach as the year progresses.

Monetary Council might opt for a larger cut

Hungarian forint national bank — Photo: FB/MNB

András Pintér from Apelso Capital notes that the central bank has been signaling a cautious approach, preparing the market for smaller steps. The market’s expectations, particularly towards the year-end, have outpaced the central bank’s plans. Therefore, in May, the Monetary Council might opt for the larger 50 basis point cut, but June could see a continuation of this trend if necessary.

The inflation trends in the services sector might concern the central bank, yet recent international developments provide some leeway for this decision. Global risk appetite has stabilised following a brief “risk-off” period in April, which is also reflected in the HUF’s exchange rate. According to Pintér, the upcoming communications will likely emphasise the nearing end of the rate-cutting cycle.

Unicredit’s lead analyst, Zsolt Becsey, highlights that the easing of public friction between monetary and fiscal policies broadens the central bank’s manoeuvring space. This flexibility is further supported by recent weak US macroeconomic data, which have bolstered expectations for three Federal Reserve rate cuts this year, benefiting emerging markets like Hungary.

The past year has seen a dramatic reduction in the base rate, from 13% to 10.75% by the end of 2023, with a mid-year target of 6.75%. This rapid series of cuts might suggest a deeper reduction by year-end, but current forecasts do not support this. In fact, the consensus points to a significant slowdown, with a year-end forecast of 6.5%.

Erste Bank’s chief economist, Orsolya Nyeste, points out that several factors, including rising inflation and the need to maintain positive real interest rates, limit further cuts in the latter half of 2024. The policies of major and regional central banks, combined with domestic inflation and fiscal conditions, will heavily influence the MNB’s remaining scope for action, which appears to be minimal.

Surge in inflation, 400 EUR/HUF exchange rate expected this year

ING expert Péter Virovácz anticipates a significant inflation surge in the second half of the year, peaking at 5.5-6%. Consequently, the June rate cut might be the last in this cycle. The expected inflation rise, fiscal adjustments boosting inflation, and the monetary policies of regional central banks all suggest that the MNB will adopt a cautious and wait-and-see approach. Should internal and external conditions turn favourable, there might be room for an additional 50 basis points cut in total.

Péter Koncz from Századvég Gazdaságkutató emphasises the growing importance of imported inflation. This highlights the crucial role of exchange rate stability in maintaining price stability. However, despite these efforts, analysts seem sceptical about the HUF’s stability over the next year. The consensus forecast suggests that

the euro exchange rate will fluctuate between 383 and 409 HUF, with many predictions leaning towards breaching the 400 mark.

This indicates that the market believes that, despite the central bank’s cautious rate cuts, the regional yield convergence will not prevent the HUF’s weakening trajectory.

Therefore, even with the Hungarian National Bank’s measured approach to monetary easing, the euro is expected to surpass the 400 HUF threshold, reflecting broader market trends and economic conditions.

Read also:

Featured image: depositphotos.com

May 21, 2024

Shocking: Hungarian top university may close due to serious financial problems?

The Budapest University of Technology and Economics (BME) is one of the best Hungarian universities, regularly ranked among Europe’s top universities. However, talks ceased with the Ministry of Culture and Innovation about increasing wages and other financial matters. They are unable to introduce a pay rise from their budget.

According to index.hu, ELTE University, the BME, the Liszt Ferenc Academy of Music and the Hungarian University of Fine Arts conducted negotiations with the Ministry of Culture and Innovation about the pay rise of their employees and teachers. These universities are state-run institutions, not foundation universities like the University of Debrecen or Szeged.

However, the trade unions of the universities could not hammer out an agreement with the government even though a salary increase seems inevitable in the sector. Index.hu said that a group of teachers at BME said their institution was sinking.

Graduates at BME University Budapest (Copy) top university — Foreign graduates at BME University. End of happiness? Photo: FB/BME

They added that the state support they get is only 40% of the level 20 years before, and they await help from the public bodies in vain. They said only a superhero or a wonder could help them.

BME is regularly among the world’s best ones, but they chose not to become a foundation university.

BME ceremonial hall Oscar winner movie scene — The main hall. Photo: FB/BME

Read also:

Hungarian top university holds its place among the world’s best ones – Read more HERE
British QS: Budapest technical university among the world’s best! – Details in THIS article

May 19, 2024