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8th May, 2025

Retail sales declined in March


Retail sales were down 0.5% month-on-month in March, despite the government-imposed cap on mark-ups in effect from the middle of the month, Portfolio writes, citing official data released by the Central Statistics Office on Wednesday.
In annual terms, retail sales were 0.4% lower, but they were 0.4% higher when adjusted for calendar effects.
Adjusted food sales were up 1.2%, non-food sales rose by 5.9% and vehicle fuel sales inched 0.1% higher.
The Economy Ministry blamed the slowdown in retail sales on the base effect, adding that the impact of Easter will be reflected in the April data, unlike last year, when the holiday fell at the end of March.
The ministry also rejected criticism from the retail trade association OKSZ, which argued that the cap on retailers’ price mark-ups will not meaningfully stimulate demand.
On the contrary, the retailers said, the measure would increase uncertainty and further delay investments in the sector.
The ministry responded by saying that the full impact of the cap on mark-ups will be seen in the April data, when retail sales may have expanded by 5-6%, according to online cash register data.
March retail data confirms that the strong January performance was a one-off, rather than a trend reversal, commented ING Bank chief economist Peter Virovacz, adding that the March data drastically undershot the market consensus.
Retail sales volume exceeded the 2021 monthly average by only 0.5% and consumer confidence remains far below the peaks of 2018-19, he noted.
The March data does not alter the economic outlook, he added, as weaker-than-expected retail sales contributed to the economic decline in the first quarter. (portfolio.hu; mfor.hu; hvg.hu; 24.hu; forbes.hu; privatbankar.hu; hang.hu)
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8th May, 2025

German companies downbeat on economy, prospects


Corporate investment sentiment among German companies in Hungary is at its weakest level since the aftermath of the financial crisis, according to the spring economic survey published by the German-Hungarian Chamber of Industry and Commerce.
Just 16% of the 236 member companies surveyed said they plan to increase development spending, while 30% intend to scale back. The 14-percentage point negative balance is the lowest since 2010.
“There’s no drama, but the trend is unmistakably deteriorating,” Chamber President Andras Savos told a Wednesday press conference, adding that sentiment was more upbeat even during the pandemic.
Companies are bracing for a period of long uncertainty, he added.
The survey shows that 52% of respondents rated the current state of the Hungarian economy as poor, up from 41% last year, while only 4% deemed it good, and just 14% foresee improvement this year, down from 26% in 2024.
The current business situation was rated as good by 28% of respondents, satisfactory by 49%, and poor by 23%. Among respondents, 26% expect conditions to improve, 25% anticipate a deterioration, and 46% foresee no change.
On another question, 72% of company leaders cited weak demand as the main risk to their business outlook, unchanged from last autumn, but sharply up from last spring.
Labour costs and economic policy uncertainty followed as major concerns.
However, 78% of respondents said they would still choose Hungary as an investment location, a slight dip from 80% last year and down from 88% four years ago. (portfolio.hu; mfor.hu; economx.hu; piacesprofit.hu; index.hu; infostart.hu)
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8th May, 2025

Record year for M&A market


Mergers and acquisitions activity increased by almost 40% to $9 billion last year, a new record, according to a report from EY-Parthenon.
The number of disclosed deals remained largely unchanged from the previous year, at 110 transactions.
For the first time in several years, the manufacturing sector overtook IT as the most active segment, accounting for 14 deals.
The number of transactions in the IT sector fell to 11 from 18 the year before.
Energy and logistics followed, each with eight deals, suggesting investors are increasingly looking to core, asset-heavy sectors amid rising capital costs and elevated risk premiums, Portfolio observes.
The share of local transactions rose from 30% to 48%, while the proportion of inbound foreign deals slipped from 41% to 34%.
Outbound investments by Hungarian companies accounted for just 18% of total deal volume, compared with 29% in 2023.
The Czech Republic and Germany remain the most popular destinations for Hungarian capital abroad. (portfolio.hu; uzletem.hu)
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