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Victor Zssiday on euro pricing: “A chain reaction weakens the efficiency of the Hungarian economy”

Victor Zssiday on euro pricing: “A chain reaction weakens the efficiency of the Hungarian economy”

Viktor Zsiday on last Thursday’s episode of the Portfolio Checklist podcast, Mihaly Varga that morning With his announcement (The possibility of increasing the special tax for banks and reconsidering interest subsidies for subsidized loans) said, among other things:

The scope to which the government can turn for money is very limited, so it is not surprising that it has turned to banks, as this sector has been very profitable recently due to the rise in the official interest rate.

According to the portfolio manager, he was naive because he had paid the previous additional profits taxnotice It is believed that Hungary’s private banking tax could be reduced next year.

The Hungarian economy has entered a classic cycle of countries pursuing a procyclical economic policy. In good times, we could not create enough reserves, and the central bank was not very cautious either, and now that the external shock has arrived, tax revenues are starting to decrease, which is why we have to tighten them.

“However, when we cut back and withdraw money, it slows the economy further, and we have to respond with cuts again.”

– said the portfolio manager of the Qalaa Investment Fund.

The specialist Portfolio also asked about another news of the day, according to which, since the beginning of the year, Hungarian Porsche has been selling most of its passenger cars at prices based on the daily euro exchange rate.

In this regard, Viktor Zsiday said that when economic actors start pricing in euros, others are increasingly likely to follow suit.

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The portfolio manager added: Such developments Weakening the effectiveness of Hungarian economic policyThe greater the spread of foreign currency in a given country’s economy, the less influence the central bank has over the economy.

“If everyone deals in euros and everything is in euros, then no matter how much the forint interest rate or forint exchange rate moves, it will have less impact on economic operations.”

It’s Viktor Zsiday euro Among the reasons, he stated that Hungarian economic policy misused its tools, for example when it continuously weakened the forint.

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