The week in business and finance in Hungary

A wrap-up of this week’s business and finance news:

BUDAPEST TO TURN TO WEALTHY TOURISTS INSTEAD OF PARTY TOURISTS

The National Touristic Development Strategy published on the website of the government includes some interesting details. For instance, the new brand name of the capital city on the international market would be “Grand Budapest”.

GLOBAL STARTUPS LIKE JOINB2B PICK HUNGARY AS THEIR COUNTRY OF ORIGIN

Today many entrepreneurs choose Hungary as the country of their dream startups. We ask one of them, Galib Mammadov from Azerbaijan about what he thinks about Hungary and what his thoughts about business atmosphere of Hungary are.

HUNGARIAN ELECTRIC PLANE OF SIEMENS GLIDES

The engines of the future electric planes of Siemens are being developed in a Hungarian startup, according to Forbes.hu.

NBH POLICY MAKERS TAKE “UNCONVENTIONAL” EASING MEASURES

The National Bank of Hungary’s Monetary Council decided to keep the central bank’s key rate on hold at 0.90 percent at a policy meeting, but took a number of other measures to ease monetary conditions in light of lower than expected inflation. The Council lowered the O/N central bank deposit rate from -0.05 percent to -0.15 percent, reduced the cap on three-month deposits, its main instrument for sterilising liquidity, to 75 billion forints (EUR 242m), and decided to raise the stock of swap instruments. After the decision, government securities yields fell and the shortest BUBOR terms slipped into the negative.

MOL PARTNERS IN KURDISTAN VENTURE PART WITH 6PC MOL STAKE

Dana Gas and Crescent Petroleum, Hungarian oil and gas company MOL’s partners in a production venture in the Kurdistan region of Iraq, said they had sold a 6 percent stake in MOL after it rejected a settlement over a long-standing dispute with the Kurdistan Regional Government that had been endorsed by all other members of the consortium.

GOVENMENT TO CUT PAYROLL TAX 2.5 PERCENTAGE POINTS NEXT YEAR

Hungary’s government plans to cut the payroll tax by 2.5 percentage points next year, rather than 2.0, because of the fast clip of wage growth, National Economy Minister Mihály Varga said. Varga noted that the government had agreed with employers and unions late last year to reduce the payroll tax a further 2.0 percentage points in 2018, but would widen the cut to 2.5 percentage points if gross wage growth exceeded 11 percent in January-September. KSH will not publish January-September wage data until November 22, but the National Bank of Hungary projected the rate for the period would exceed 11 percent in a quarterly forecast released during the week.

INFLATIONARY EFFECT OF WAGE RISES REMAINS “MODERATE” – NBH

The National Bank of Hungary played down the impact of steep wage growth on inflation in a quarterly report. “All in all, the inflationary effect of wage growth remains moderate,” the central bank’s staff said in the fresh Inflation Report. “The upward pressure on costs from wage increases is offset by the decline in the social contribution tax and the corporate income tax, progress in combatting the shadow economy and the weakened relation between labour costs and prices in the post-crisis period,” they added.