Macro Monitor – June 2023


At its meeting in June, the Monetary Council of the central bank did not change the base rate (13%) but continued to cut the policy rate. The central bank cut its effective rate, the overnight deposit facility rate, by 100 basis points to 16.0%.

Raw data show that retail sales decreased by 13.6%, while calendar-adjusted data show that it decreased by 12.6% in April 2023, compared to the same period of the previous year. Within this, sales decreased by 8.6% in specialised and non-specialised food shops and by 10.7% in non-food shops. The turnover volume of petrol stations fell by 22.9%, exceeding the other main groups.

In June 2023, the SZIGMA CI indicator, which provides feedback on the current state of the Hungarian economy, continued to show a trend reversal in the economic growth rate, according to its value until May 2023, as the growth rate started to approach its historical trend.

The other indicator, SZIGMA LEAD, is a short-term indicator for the future of the Hungarian economy. The indicator shows a double turnaround, firstly indicating a positive stronger economic growth. Secondly, a slowdown and a significant drop in the growth rate.

In an environment of higher interest rates and higher inflation, the trend towards a preference for premium Hungarian government bonds with above-inflation yields over those with fixed yields continued.

Agricultural producer prices down by 7.2%

In April 2023, the growth rates of all three price indices examined (industrial producer price index, construction materials price index, agricultural producer price index) fell significantly. Moreover, agricultural producer prices have fallen. Agricultural producer prices fell by 7.2% year on year in April 2023, following a year-on-year increase of 5.1% in March 2023. The exceptionally high base played a role in this, with agricultural producer prices rising by 45-61% year on year between April and September 2022 due to the exceptional drought.

• The SZIGMA indicator system

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.