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.
DAIMLER LAYS CORNERSTONE OF HUF 3BN TRAINING CENTRE AT BASE IN HUNGARY
German carmaker Daimler laid the cornerstone of a more than 3 billion forint (EUR 10m) training centre at its base in Kecskemét, in central Hungary. Hungary’s government is supporting the investment with a 622 million forint grant. From September of next year, some 250 students, mostly from trade schools, will start their training at the Mercedes-Benz Academy.
SAMSONITE INAUGURATES HUF 3.8BN CAPCITY EXPANSION
Luggage maker Samsonite inaugurated a 3.8 billion forint (EUR 12.3m) expansion at its base in Szekszárd, in southwest Hungary. The company was awarded nearly 900 million forints in government grant money for the investment which will create 100 jobs.
BÉRES GYÓGYSZERGYÁR INAUGURATES HUF 3.2BN CAPACITY EXPANSION
Hungarian dietary supplement maker Béres Gyógyszergyár inaugurated a 3.2 billion forint (EUR 10.3m) capacity expansion at its base in Szolnok, in eastern Hungary. A government grant covered half of the cost of the investment which created 60 jobs. Chairman József Béres said the investment raised the Good Manufacturing Practice-certified production area at the plant by 1,027 square metres to 3,700 square metres, while nearly doubling overall production capacity and increasing warehouse space by 40 percent.
BUDAPEST BOURSE LAUNCHES XTEND TRADING PLATFORM FOR SMES
The Budapest Stock Exchange launched a multilateral trading platform for SMEs. The platform, dubbed Xtend, is “calibrated to the needs of medium-sized businesses and designed to promote their growth”, said bourse CEO Richárd Végh.
FINANCIAL SANCTIONS OVER MIGRATION POLICY “UNTHINKABLE”, SAYS ORBÁN
Prime Minister Viktor Orbán said it was “totally unthinkable” that Hungary would lose some of its European Union funding or be fined for the government’s policy on migration, responding to a question in a weekly interview on public radio. “Such types of threats have no legal basis in the European Union’s legal system,” Orbán said on Kossuth Radio, answering a question about the possibility of penalties related to the government’s stand on mandatory refugee quotas. Tying the issue of mandatory migration to the matter of Hungary not wanting to become a country of immigration is “illegal”, Orbán said.
FEMALK OWNER INVESTS MORE THAN HUF 500M IN DISADVANTAGED HOMETOWN
Hungarian foundry FemAlk inaugurated a 521 million forint (EUR 1.7m) production hall in the village of Erdőhorváti, in northeast Hungary. József Sándor, FemAlk’s owner, put the production hall in the village where he grew up after watching the community’s population grow smaller. He called the base an “experiment” that will employ 23 young people who spent a year training in Budapest. If they perform well, headcount could be raised to 60-80, he added.