At its January meeting, the central bank’s Monetary Council left the base rate in place since September, slowing monetary easing. The base rate in Hungary therefore remains at 6.5%.
In November, retail sales increased by 4.1% year on year in terms of both raw and calendar-adjusted data. Within this, compared to the same period of the previous year, sales increased by 5.3% in specialised and non-specialised food shops, 4.5% in non-food retailing and 1.3% in automotive fuel retailing.
The value of the SZIGMA CI indicator, which provides feedback on the current state of the Hungarian economy, was -0.476 up to December 2024, which is still below trend, but is trending closer to the historical trend level. This means that, while the Hungarian economy is still growing at a rate below its historical trend, there has been a slight improvement, in other words, the economic growth momentum is weak but is showing signs of slight improvement. The coming months will show the impact the economic programmes starting in 2025 and the changing international environment have on economic growth.
The other indicator, SZIGMA LEAD, a short-term indicator for the future of the Hungarian economy, forecasts continued below-trend growth by the end of the forecast horizon. The current forecast continues to foresee rapid and strong growth in the first period, with a sharp decline in the second period of the forecast.
In December 2024, consumer prices rose by 4.6% on average year on year. Thus, in 2024, consumer prices increased by 3.7% on average compared to 2023.
The average increase in the price of services was moderated by the introduction of county and country passes
In December, prices of services rose by an average of 6.8%, with cinema tickets and TV subscriptions contributing the most, at 13.9% and 16.0% respectively. The price increase for games of chance, which has been a significant contributor in previous months, has increased from 0.2% to 0.4%. The price of postal services has risen by 15.6% in the last six months compared to the previous year. Telephone, internet and communication prices rose by 4.7% from October and by 4.9% year on year. In contrast, the average increase in the price of services was moderated by, among other things, the prices of refuse disposal, water charges and sewerage disposal remaining unchanged and the introduction of county and country passes, which reduced the price of travel to work and school by 21.7% in April, and a 13.3% decrease in the price of other long-distance travel.
The SZIGMA (abbreviation of the Hungarian name “Századvég Index a Gazdasági Momentum Alakulásáról”, in English: Századvég Index of the Development of Economic Momentum) is a simultaneous and preliminary indicator system developed by Századvég for the Hungarian economy.
It is crucial for economic policymakers and analysts to have an accurate picture of the state of the economy, but statistical data are often available with considerable delays. In contrast, the SZIGMA indicators provide information on the economic cycle and the business cycle within 30 days of the reference month, on a monthly basis.
The indicator system consists of two indicators, the SIGMA CI, which summarises the current state of the economy, i.e. information extracted from simultaneous variables, and the SIGMA LEAD, which provides preliminary information on the expected economic trajectory. A positive CI index means that economic growth is above the historical trend, and a negative CI index means that growth is below the historical trend. The SIGMA LEAD indicator provides a short-term forecast for a 9-month period. If the SIGMA LEAD indicator is positive, growth is expected to be above trend in 9 months’ time (i.e. three quarters of a year later), while if it is negative, growth is expected to be below trend in the near future.
