April 30, 2024 09:04 GMT
Forint Exhibits Resilience Despite Softer-Than-Expected Q1 GDP
HUF
The forint is outperforming its CE3 peers again Tuesday morning, despite GDP data for Q1 suggesting that the recovery of the Hungarian economy is proceeding at a slower pace than had been anticipated. EURHUF is down 0.1% on the session, below both the 50-day EMA (intersecting at 392) and the 391 handle. A sustained move lower could expose the Apr 5 low of 388.34.
- Data this morning showed GDP rose an annual 1.1% in Q1-2024 (Est: +1.3% y/y) after no growth in 4Q-2023 and a three-quarter recession before that.
- As a reminder, Prime Minister Orban’s government has downgraded its economic growth forecast to an annual 2.5% for this year from 4%. Meanwhile, the cabinet said it would postpone about HUF 675bn ($1.7bn) in state-funded investments to meet its upwardly revised deficit goal of 4.5% of GDP for this year.
- On Friday, S&P kept its credit rating and outlook steady for Hungary despite fiscal pressures. It said: “From 2025, we project consolidation efforts […] will contain fiscal deficits at around 4% of GDP or lower, allowing the authorities to broadly stabilize government debt in the medium term.”
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