Latest economic news in Hungary

6 Dec 2024

- A staff-free, automatic Coop is opening in Szeged: Szeged is gearing up for a shopping revolution as the Coop store at Szent István Square prepares to launch an automated, staff-less shopping experience. This modernization aligns with Coop Szeged Zrt.'s strategy to reduce reliance on human cashiers.

The store, expected to go fully automated by early 2025, will replace traditional checkout counters with self-service kiosks and may operate 24/7. Inspired by similar stores in the Czech Republic, the new setup will utilize facial recognition technology and an app for a seamless shopping experience, while maintaining safety through surveillance measures. Read more here.

- Fitch raises Hungary's credit outlook from negative to stable: Fitch Ratings has upgraded Hungary's outlook from negative to stable and maintained its credit rating at BBB. This change indicates a more favorable assessment, influenced by reduced political uncertainty ahead of the 2026 elections.

Fitch predicts that the Hungarian National Bank will pursue a cautious monetary easing strategy, with an expected decrease in the benchmark interest rate to 5.25% by the end of 2025. Read more here

- Raiffeisen Bank to pass transaction fees to customer: Starting February 17, 2025, Raiffeisen Bank will raise transaction fees by 0.15 percentage points, capped at 10,000 HUF, due to a government-imposed fee hike. For example, a transfer of 100,000 HUF will now cost customers 225 HUF, up from 150 HUF. Cash withdrawal fees will also rise, with cardless withdrawals increasing an extra 300 HUF.

Transfers involving currency conversion will incur an additional 0.45% fee, potentially increasing costs significantly. Other banks in Hungary are following suit, reflecting a broader trend as the banking sector faces rising operational costs. Read more here.

2 Dec 2024

- Christmas Tree Prices Expected to Rise: This year, Hungarians can anticipate Christmas tree prices increasing by 5-10%. According to a recent survey, spruce trees will range from 5,000 to 5,500 HUF per meter, silver firs from 6,000 to 8,000 HUF, and Nordmann firs from 8,000 to 10,000 HUF. Notably, 72% of consumers plan to spend at least 7,000 HUF, with 62% preferring the popular Nordmann fir.

Additionally, around 12.5% are looking for rooted trees, while 25% will opt for artificial ones. The production of Christmas trees is largely managed by family farms, covering approximately 3,500 hectares in Hungary. Read more here.

1 Dec 2024

- Erste Bank to make customers pay transaction fees from 2025: Erste Bank has announced it will start passing transaction fees onto customers beginning February 3, 2025, following a trend among other banks like MagNet Bank and Polgári Bank. This decision is a response to a government-imposed transaction tax that took effect on August 1 of this year, after which banks were restricted from charging these fees until the end of 2024.

Common transactions such as bank transfers, direct debits, and cash withdrawals will incur these new fees, with Unicredit Bank also planning to implement similar charges starting February 1, 2025. Read more here

27 Nov 2024

- OTP, K&H and UniCredit Bank increase their fees: Starting February 1, 2025, UniCredit Bank will implement new transaction fees for transfers and direct debit payments on its Ikon Plus account packages, following a trend set by other banks. A bookkeeping charge of 0.134% will apply, capping at HUF 8,079 per transaction, while the first four cash withdrawals each month remain free, but fees will increase by 0.3% for subsequent withdrawals.

This follows similar announcements from OTP and K&H banks, with different effective dates starting in November 2024 through January 2025. Read more here.

25 Nov 2024

- Road closure in Austria affects Hungarian commuters: A concrete barrier has been erected on a key road in Austria's Burgenland region, impacting Hungarian workers commuting to Austria just a few kilometers from the Sopron border. This closure was initiated by the Klingenbach town council in response to increasing traffic from Hungarian commuters, following the recent closure of another border crossing.

As a result, congestion has worsened around the Sopron crossing as commuters search for alternative routes. Legal challenges against these border control measures are ongoing, with calls for greater political advocacy to address the concerns of affected commuters. Read more here.

- Hungarian forint hits 412.5 HUF per Euro: The Hungarian forint has hit a new two-year low, trading at 412.5 HUF per euro before slightly recovering to 411.7 HUF, amid a fluctuating dollar rate. This decline follows recent financial market shifts, including Donald Trump's nomination of Scott Bessent as U.S. Treasury Secretary, which influenced U.S. bond yields and currency values.

Factors contributing to the forint's weakness include the ongoing Russian-Ukrainian war, low interest rates set by the Hungarian National Bank, and economic tensions surrounding EU fund withdrawals. While a weaker forint may enhance export competitiveness, it also risks exacerbating inflation, which is already among the highest in the EU. Read more here

- Gránit Bank to go public: Gránit Bank is gearing up to go public with an initial public offering (IPO) set to begin retail subscriptions this Tuesday and trading expected to start on December 23. Shares will be offered at HUF 13,172 to HUF 15,054, hinting at a higher valuation than many traditional European banks.

Despite not planning to pay dividends soon, the bank forecasts a significant growth in profitability, aiming for a net income between HUF 110-122 billion by 2033, with annual growth rates of 18-19%. The bank currently holds a 6-7% market share in corporate lending and 1.5-2% in retail lending. Read more here

21 Nov 2024

- Minimum Wage Increase Confirmed for 2024: Hungary's minimum wage is set to increase by 9% in 2025, while the guaranteed minimum wage will rise by 7%. This decision follows negotiations between the government and employers, aiming for cumulative increases of 36% over the next three years—9% in 2025, 13% in 2026, and 14% in 2027.

To support businesses facing higher wages, employers may see some relief in social contribution taxes. Despite ambitious growth forecasts, there are concerns about the feasibility of these plans given current economic conditions. Read more here

20 Nov 2024

- Hungary Launches Satellite Monitoring System: Hungary is embarking on an exciting space initiative with the establishment of its satellite monitoring program, HUSAT. This plan includes launching the geostationary satellite HUGEO and eight low Earth orbit satellites (HULEO) by 2032, making it the largest privately funded satellite project in the region.

The project is spearheaded by 4iG Space and Defense Ltd., which aims to create a comprehensive facility in Martonvásár for the design, assembly, and analysis of satellite data, enhancing both civil and defense capabilities. The facility, expected to employ about 300-400 staff, will be operational by 2026, fostering local talent and expertise in Hungary's growing space sector. Read more here

18 Nov 2024

- Lidl to add 40 new stores in Hungary: Lidl announces plans to open 40 new stores in Hungary, increasing its total to 250 and solidifying its position as a market leader with an expected market share of over 20%. This announcement marks Lidl's 20th anniversary in the country and comes alongside plans to boost its logistics capabilities from four to five centres.

As of now, Lidl holds a 20.8% market share, significantly ahead of competitors like Spar and Penny. Over two decades, Lidl has established itself as one of Hungary’s largest employers, currently providing jobs to around 9,500 individuals. Read more here

17 Nov 2024

- Lidl Hungary Marks 20 Years: Lidl Hungary is celebrating its 20th anniversary, evolving from a handful of store openings to the dominant discount retailer in the country. The company acknowledges the support of its 3.5 million customers and nearly 10,000 employees, while emphasizing its commitment to sourcing over 4,500 domestic products from 500 Hungarian suppliers.

Looking ahead, Lidl aims to maintain its market leadership by continuing to provide high-quality, affordable products. Read more here