Market Drive. Hungary
Main Highlights:
- The business climate is assessed as favorable. Hungary’s seasonally-adjusted Purchasing Managers Index (PMI) rose to 63.1 points in December from 56.0 in November.
- Exports and imports are growing. At the same time, imports exceed exports. The value of exports in EUR terms was 18% and that of imports 29% larger in November 2022 than in the same period of the previous year.
- Inflation is rising. Overall inflation rose 24.5 per cent year on year on December, the highest in the EU. The bloc’s average is 10.4 per cent.
- The price of diesel fuel increased by more than 30% over the year. Hungary's government scrapped a price cap on fuels on December 2022. Prices will now be set according to the market rates of 640 forints (€1.56) per litre of petrol and 699 forints (€1.70) per litre of diesel. Before, it was the state-imposed cap of 480 forints (€1.17) per litre.
Expansion in the manufacturing sector
The Hungarian Association of Logistics, Purchasing and Inventory Management (Halpim) said Hungary’s seasonally-adjusted Purchasing Managers Index (PMI) rose to 63.1 points in December from 56.0 in November.
Hungary Manufacturing Purchasing Managers Index (PMI)
Source: https://www.investing.com/economic-calendar/hungarian-pmi-674
According to MTI, a PMI over 50 signals expansion in the manufacturing sector. Among the PMI sub-indices, the new orders index rose from the previous month and remained over the 50-point mark. The production volume index also climbed and was over 50. The employment index indicated growth for the fifteenth month in a row. Delivery times were shorter in December but the sub-index is still under 50. The gauge of purchased inventories rose and was above the 50-point mark, signalling a sustained recovery.
This indicator is the highest since the beginning of the year and indicates a high growth rate of the manufacturing sector.
Trade in goods more than a year ago. The negative balance is growing
The value of exports amounted to EUR 13,132 million (HUF 5,364 billion) and that of imports to EUR 14,415 million (HUF 5,900 billion).
The deficit of the external trade in goods was EUR 1.3 billion (HUF 536 billion).
The share of EU Member States (EU27_2020) was 78% in exports and 63% in imports.
The value of exports in EUR terms was 18% and that of imports 29% larger in November 2022 than in the same period of the previous year. The balance of the external trade in goods deteriorated by EUR 1.2 billion. Compared to the previous month, the level of export in goods increased by 5.0% and that of import in goods by 7.3%.
https://www.ksh.hu/docs/eng/xftp/gyor/kue/ekue2211.html
https://www.ksh.hu/docs/eng/xftp/gyor/kue/ekue2211.html
Inflation is high and rising
Despite measures such as retail price caps introduced even before the war in Ukraine sparked an energy crisis, food prices in Hungary rose more than 44 per cent in December compared with the previous year, according to government data. Overall inflation rose 24.5 per cent year on year on December, the highest in the EU. The bloc’s average is 10.4 per cent.
Inflation in the industry is even higher than in the consumer sector: 35% on December. Inflation is fastest in the energy sector: 114% on December.
Hungarian government scraps price cap on fuels
Hungary's government scrapped a price cap on fuels on December 2022 after a lack of imports and panic buying led to fuel shortages across the country in the past days that oil and gas group MOL said created a critical situation. The ending of the price cap will boost inflation. Hungary's annual inflation is already running above 21%.
It would take up to two months to restore imports, and stability.
Prices will now be set according to the market rates of 640 forints (€1.56) per litre of petrol and 699 forints (€1.70) per litre of diesel. Before, it was the state-imposed cap of 480 forints (€1.17) per litre.
At the same time, the price of diesel fuel increased by more than 30% over the year.
https://autotraveler.ru/en/hungary/trend-price-fuel-hungary.html#.Y9kMVD1BzBU
Sources:
https://www.investing.com/economic-calendar/hungarian-pmi-674
https://www.ksh.hu/docs/eng/xftp/gyor/kue/ekue2211.html
https://www.ft.com/content/6074bbc2-247b-46a1-bcce-03c464cec8b4
https://www.reuters.com/business/energy/hungary-government-scraps-price-cap-fuels-2022-12-06/
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