According to Portfolio Hungary:
The postponed first rate cut in May might be postponed further until July at minimum, because seeing the latest dynamically growing wage data the central bank will demonstrate cautiousness again, analysts said to portfolio.hu poll today, when we asked 21 experts. Most of those who answered (18 experts) think that the Monetary Council of the NBH will leave the base rate unchanged at 8% on its June 25 rate setting meeting, and will cut 100 bps before the end of this year, while there will be a further 50 bps rate cut in 2008.
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Wednesday, June 20, 2007
Koka Calls For End To Tight Peg
Hungarian Economy Minister Janos Koka has called for a loosening of the trading band which governs the value of the forint. He said the forint's trading limits are hobbling the central bank's ability to cut Hungary's inflation rate. He is the first Cabinet member to suggest these limits may need to be abolished, but he joins a growing chorus of economists calling for the forint to trade freely like the Polish, Czech and Slovak currencies.
Scrapping the trading band would allow the forint to strengthen enough to cut import prices and bring down the annual inflation rate, at 8.5 percent in May. Koka's comments contrast those of central bank Governor Andras Simor, who says inflation can be slowed without freeing the forint, and Finance Minister Janos Veres, who says the Cabinet is not ready to lift the limits.
The forint rose to 248.80 per euro by 1 p.m. in Budapest from 249.01 yesterday, reaching a month high. The currency is allowed to move between 240.01 and 324.71 against the euro, hampering the central bank's ability to cap consumer-price growth.
Stemming inflation, along with cutting the budget deficit from last year's record 9.2 percent of GDP, is part of conditions to qualify for euro adoption.
Scrapping the trading band would allow the forint to strengthen enough to cut import prices and bring down the annual inflation rate, at 8.5 percent in May. Koka's comments contrast those of central bank Governor Andras Simor, who says inflation can be slowed without freeing the forint, and Finance Minister Janos Veres, who says the Cabinet is not ready to lift the limits.
The forint rose to 248.80 per euro by 1 p.m. in Budapest from 249.01 yesterday, reaching a month high. The currency is allowed to move between 240.01 and 324.71 against the euro, hampering the central bank's ability to cap consumer-price growth.
Stemming inflation, along with cutting the budget deficit from last year's record 9.2 percent of GDP, is part of conditions to qualify for euro adoption.
Tuesday, June 19, 2007
Decline in Hungarian Construction Activity
Portfolio Hungary has this today:
n April 2007 the volume of the construction activity decreased by 3.7% according to unadjusted indices and by 6.4% adjusted seasonally and by working days from April 2006 Hungarian Central Statistical Office reported on Tuesday. In the first four months the output exceeded the level of the same period of 2006 by 1.2%. The pace is significantly slower compared to March, when output grew by 3.3%.
The decrease in April was caused by the fall in the production of road-builder enterprises. The output of division building of complete constructions and civil engineering decreased by 5.2%, related to April 2006, but the production of building installation rose by 5%. According to unadjusted indices the construction of buildings went up by 5.6% but that of civil engineering fell by 14.8% from same month a year ago. From the beginning of 2007 construction of buildings rose at a slight pace, by 2% while that of civil engineering was at the level of the previous year.
n April 2007 the volume of the construction activity decreased by 3.7% according to unadjusted indices and by 6.4% adjusted seasonally and by working days from April 2006 Hungarian Central Statistical Office reported on Tuesday. In the first four months the output exceeded the level of the same period of 2006 by 1.2%. The pace is significantly slower compared to March, when output grew by 3.3%.
The decrease in April was caused by the fall in the production of road-builder enterprises. The output of division building of complete constructions and civil engineering decreased by 5.2%, related to April 2006, but the production of building installation rose by 5%. According to unadjusted indices the construction of buildings went up by 5.6% but that of civil engineering fell by 14.8% from same month a year ago. From the beginning of 2007 construction of buildings rose at a slight pace, by 2% while that of civil engineering was at the level of the previous year.
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