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2nd September, 2010
Simor: Weak forint holds back growth
The appreciation of the Swiss franc is a threat to Hungarian economic growth, National Bank governor Andras Simor warned yesterday.
He noted in a statement to state news agency MTI that the depreciation of the forint leads to higher monthly payments for households with foreign-currency loans, who then cut back consumption and investments.
To a similar extent, Simor said, the weaker forint means a deterioration in banks’ lending portfolios, in which case they tighten credit conditions, leading to restrained lending.
The effect of lower consumption, reduced investment and restrained lending can slow down growth, outweighing the benefits of a weaker forint, Simor added.
Any further weakening of the currency also endangers the MNB's 3% inflation target, he noted.
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2nd September, 2010
MNB says IMF safety net may be needed
Hungary may need the financial safety net of the IMF and EU if the global investment climate turns negative, which is not at all an unlikely scenario, the National Bank (MNB) told Reuters news agency in an e-mail.
Banks would need an additional Ft 40-50 billion of capital if the Swiss franc remains at an exchange rate of Ft 215 or higher and if the economy falls into recession, according to the scenarios drawn up in the MNB’s stress test earlier this year. In the stress test, the MNB calculated with an exchange rate of Ft 315 per euro, Napi Gazdasag writes.
The forint's depreciation against the Swiss franc has caused higher than expected lending losses for the bank sector, the MNB said, without going to detail.
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2nd September, 2010
No new IMF deal may mean downgrades
The IMF loan programme has had an important stabilising effect on the Hungarian economy and without a new agreement, Hungary's debt rating could be downgraded, according to New York investment consultants AllianceBernstein.
The firm’s analysis states that Hungary made significant progress in the last two years, as the IMF has filled the gap in external financing.
However, unless the government voluntarily re-engages the IMF in talks, then Moody's could downgrade the country's sovereign debt rating by one grade, AllianceBernstein observes.
Credit-rating agencies have warned that they could lower their ratings of Hungarian debt due to the failure of talks with the IMF.
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2nd September, 2010
PMI recedes slightly in August
The Purchasing Managers Index (PMI) fell to 51.9 points in August from 53.9 in July, the logistics and inventory association MLBKT announced. The index was 5.8 points higher than in August of last year.
The PMI sank below the 50-point mark – indicating a contraction of economic activity – only in May and June so far this year.
The index of new orders was 54.4 points in August, down 2.1 points from July, but above 50 for the eighth consecutive month.
Manufacturing companies anticipate a rise in procurement prices, as this sub-index climbed to 69.2 points. The employment index also remained in positive territory at 51 points, suggesting a rise in new hirings.
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2nd September, 2010
Trade surplus widens in June
Hungary recorded a trade surplus of €564 million in June, up from €398 million in May, according to detailed figures released by the Central Statistics Office.
The preliminary data showed a surplus of €567 million.
The surplus in the first six months came to €2.860 billion, as exports were up 21% year-on-year to €34 billion, while imports rose 17.4% to €31.1 billion. Preliminary data indicated a surplus of €2.812 billion.
In the same period, the forint appreciated 6% against the dollar and 6.4% against the euro.
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2nd September, 2010
Car sales pick up in August
A total of 2,994 new passenger cars were registered in August, up from 2,425, a 24% year-on-year rise, according to market researcher Datahouse.
Sales of small commercial vehicles rose from 484 to 773.
Despite the August data, new car registrations tumbled to 28,900 in the first eight months, 37% lower than the 45,900 in the same period of 2009.
Ford regained its leading position, overtaking Suzuki in sales last month, followed by Renault, Opel, Skoda and Volkswagen. Ford's market share was 12.2% by the end of August.
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2nd September, 2010
Rate on student loans at all-time low
Student loans will be available at a record low interest rate of 8.5% from this academic year, state-owned student loan provider Diakhitel announced yesterday.
The creditor lent Ft 22 billion to 68,783 students last year. Since its foundation in 2001, Diakhitel has extended Ft 198 billion in loans to 290,035 students. Outstanding loans stood at Ft 211 billion at the end of June. The average size of the loans is Ft 321,000.
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