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HUF: Budget Concerns and Disappointing Data Add to HUF Woes

HUF
EM BulletHomepagemarkets-real-timeCEEMEABulletGlobalEmerging Market NewsHungaryRegion

EURHUF has extended the bounce off yesterday’s lows, as budget concerns and disappointing economic data adds to HUF headwinds. The cross is 0.28% higher on the session and is approaching the week's best levels at typing.

  • Hungary’s industrial output fell 6.4% y/y (Est: -5.9%) in July versus -3.7% in June, the sharpest rate of contraction this year. The data follows below-expectations retail sales figures posted Thursday, as the government continues to blame the economy’s underperformance on Hungary’s main export markets in western Europe, particularly Germany.
  • HUF weakness yesterday was triggered by a Bloomberg report, which stated that the government is preparing for 1.5 years of spending in the run-up to the 2026 election, which will result in an overshoot of budget-deficit goals unveiled earlier this year.
  • The report followed sharp criticism from the NBH’s Governor earlier on Thursday. Matolcsy said, “In our view the government’s policies are very mistaken, because they amount to pro-inflationary steps.”
  • The Governor also rejected an accusation by Economy Minister Marton Nagy, his former deputy, that the bank is single-mindedly focused on price growth. The comments mark the latest in a series of scathing remarks between central bank and government officials.
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EURHUF has extended the bounce off yesterday’s lows, as budget concerns and disappointing economic data adds to HUF headwinds. The cross is 0.28% higher on the session and is approaching the week's best levels at typing.

  • Hungary’s industrial output fell 6.4% y/y (Est: -5.9%) in July versus -3.7% in June, the sharpest rate of contraction this year. The data follows below-expectations retail sales figures posted Thursday, as the government continues to blame the economy’s underperformance on Hungary’s main export markets in western Europe, particularly Germany.
  • HUF weakness yesterday was triggered by a Bloomberg report, which stated that the government is preparing for 1.5 years of spending in the run-up to the 2026 election, which will result in an overshoot of budget-deficit goals unveiled earlier this year.
  • The report followed sharp criticism from the NBH’s Governor earlier on Thursday. Matolcsy said, “In our view the government’s policies are very mistaken, because they amount to pro-inflationary steps.”
  • The Governor also rejected an accusation by Economy Minister Marton Nagy, his former deputy, that the bank is single-mindedly focused on price growth. The comments mark the latest in a series of scathing remarks between central bank and government officials.