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Tuesday will be the most important economic event of the week

Tuesday will be the most important economic event of the week

In the field of tourism, the number of guest nights increased during the month of January compared to the previous year by 10.5 percent, as the number of nights by local guests increased by 8.9 percent, and the number of nights by foreign guests increased by 12.1 percent. The analyst added that it is hoped that the positive trend will continue in February, and thus tourism can contribute positively to the performance of the economy in 2024 as well.

Attention is focused on the central bank

Magyar Nemzeti Bank (MNB) announces several statistics this week, one of which is the current balance of payments data for the fourth quarter, which will be presented on Wednesday, and thus for the whole of 2023.

– Based on data for the first three quarters, it is likely that the current account will close with a small surplus in 2023 after a deficit the previous year of more than eight percent. Gabor Regis noted that this contributed greatly to the fact that the forint was able to stabilize in 2023 compared to its exchange rate in 2022. The improvement of the balance played a role in the improvement of the exchange ratio (normalization of energy prices) and the decrease in the volume of imports, which was caused by a decrease in internal demand. At the same time, the balance is worsened by increased profit outflow, which is the result of profit-driven inflation. One of the determinants of exchange rate movements this year will be the external balance, and this will be largely determined by the development of external demand, and primarily the change in the performance of the German economy.

– From a Hungarian macroeconomic point of view, the most important event of the week will be the Central Bank's decision on Tuesday – the economist noted, noting that it is not clear what monetary policy will do here. The previous month, MNB accelerated At the easing rate, the benchmark interest rate was reduced by one hundred basis points to nine percent. The rapid easing amplified news that had a negative impact on the forint exchange rate (such as the dispute between MNB and the government, as well as developments related to EU funds), so the exchange rate touched the 400 level. As a result, the central bank, according to press reports, By verbally intervening and revealing additional information about the expected interest rate path, calming markets. However, for the effect of verbal intervention to be lasting, it is necessary that intention is also reflected in the actual decision on the interest rate. During the previous month's decision, the central bank did not commit itself to a further easing of a hundred basis points, so there is no impediment to a smaller easing.

– Accordingly The central bank is not expected to cut the benchmark interest rate by one hundred basis points again. In fact, if it really wants to show strictness, it will only cut the benchmark interest rates by fifty basis points, even less than 75 basis points. basis points, indicating its commitment to cautious, data-driven relaxation. Gabor Regis stressed that this would have a positive impact on the exchange rate, while a decrease of one hundred basis points would weaken it.

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How is the development of developed countries arranged?

According to the analyst, among the Eurostat data published this week, the 2023 purchasing power parity data published on Tuesday should be highlighted. From this we can find out how each country's GDP per capita will develop at purchasing power parity in 2023, and this is the indicator that is often used to describe the development of a country. Before last year, Hungary's per capita GDP, on a purchasing power parity basis, was 77% of the EU average, which puts us on the same level as Portugal and Romania, while we were ahead of Latvia, Croatia, Greece and Slovakia. And Bulgaria. The new data release shows the ranking of economic development of countries in 2023, although it can be seen that in many cases these differences are so low that they are far from being noticeable in practice.

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