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28th June, 2018

Forint sinks to new record low

The forint traded at more than 328 per euro on Wednesday afternoon, reaching its weakest level to date.

Analysts are revising their forint forecasts, as fewer and fewer of them believe that the currency will start strengthening before it sinks to 330 per euro, Portfolio reports.

The forint has lost 2.3% of its value against the euro over the last week and more than 5% since the beginning of the year. Meanwhile, the Polish zloty dropped by only 2.3% this year and the Czech crown has strengthened by 2%.

The forint’s previous record low against the euro of 327.6 was reached in January 2015. (portfolio.hu; napi.hu; hvg.hu; 444.hu; nepszava.hu)
28th June, 2018

Fewer registered unemployed in May

The unemployment rate was 5.3% in May, as the number of registered unemployed stood at 244,200 at the end of the month, down 15.1% from a year earlier, the state employment service NFSZ announced.

Data shows that 3.6% of the working-age population were out of work.

Some 33,500 people registered as new job seekers last month, down by 14.3% from one year earlier.

Among the unemployed, 69,800 people, or 28.6%, had been seeking a job for more than a year.

Among the registered unemployed 45.3% did not receive any benefits.

In May, 32,200 job vacancies were registered, of which 46.7% were subsidised by the state. The number of vacancies was 110,700 in May. (portfolio.hu; napi.hu)
28th June, 2018

IMF sceptical of 2019 deficit target

The 2019 budget deficit target set by the government of 1.8% of GDP is not realistic, as the shortfall will reach 2%, the IMF announced on Wednesday after its delegation completed its regular annual visit to Hungary.

In order to reduce the risk of a higher budget deficit, the IMF recommends growth-incentive measures, such as phasing out the remaining crisis taxes, expanding the scope of genuine taxpayers, simplifying tax administration and increasing budget revenues.

The IMF repeatedly underlined the importance of introducing a general property tax.

The IMF proposed aid targeted to the poor in preference to fixing utility prices.

The report argues for simplified construction approvals, the easier connection of small-scale electricity producers to the national grid and action against corruption.

GDP growth will reach 4% this year but may decline afterwards as Hungary will receive fewer EU funds from 2020, the IMF warns, adding that the pace of growth can be maintained only if structural reforms are completed.

The IMF will release its detailed report on Hungary in the coming weeks after its board approves it. (portfolio.hu; magyarhirlap.hu; magyaridok.hu; napi.hu; hvg.hu; nepszava.hu)
28th June, 2018

Haulers ask MEPs to reject new posted labour directive

Haulers association NiT Hungary has asked Hungarian MEPs to reject the new EU directive on posted labour, it was announced on Wednesday.

The new directive will expand the scope of the posted labour law to include transport company drivers, who would not be allowed to work for lower Hungarian wages when they drive in Western Europe.

The directive orders that they be paid the same wages as paid to drivers in the host countries.

Not only Hungarian but all Eastern European hauling companies will be negatively affected if the new directive is passed, NiT highlighted.

The European Parliament will vote on the issue during the summer or the autumn. (napi.hu; portfolio.hu; magyarhirlap.hu)
28th June, 2018

Hungary lags in PPP wage comparison

Hungary lags behind its peer countries in terms of purchasing power parity (PPP), the OECD found in a recent study.

The average PPP wage in Hungary was $22,576 in 2017, up from $20,825 a year earlier. The 2017 figure was the second lowest among OECD countries, ahead of only Mexico with $15,314.

On the other hand, Hungary performed well in wage increase, producing the second highest advance of 8.4% after the leading 10.1% in Iceland. (mfor.hu; napi.hu; nepszava.hu)
28th June, 2018

New VAT reporting rules next week

From July 1, all businesses issuing an invoice with VAT reaching Ft 100,000 must report the transaction to the tax authority NAV, Napi reports.

Zsuzsanna Verebelyi, head of tax consultancy Adonavigator, said these transactions will have to be reported within five calendar days, not working days.

If the VAT content reaches Ft 500,000, then the deadline is only one day.

The fine for failing to report transactions on time may reach Ft 500,000, Verebelyi strongly warned. (napi.hu)

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