After cutting the base rate the previous month, the Monetary Council of the central bank halted monetary easing at its August meeting. As a result, the base rate (and the policy rate) in Hungary is currently at 6.75%.
In June, retail sales increased by 2.6% year on year on both a raw and calendar-adjusted basis. Within this, compared to the same period of the previous year, sales increased by 3.2% in specialised and non-specialised food shops, 3.6% in non-food retailing and 0.5% in automotive fuel retailing.
Measured up to July 2024, the value of the monthly SZIGMA CI indicator, which provides a snapshot of the current state of the Hungarian economy, was -0.252. This is down from the previous month’s index value of -0.115. This means that the Hungarian economy is still growing at a rate below its historical trend rate.
The other indicator, SZIGMA LEAD, a short-term indicator for the future of the Hungarian economy, forecasts above-trend growth by the end of the forecast horizon, but a slight weakening towards the end of the forecast horizon.
In July 2024, consumer prices rose by 4.1% on average year on year.
Household energy prices fell by 4.5% on average in July
Partly due to the build-up of the base effect in September 2023, the average fall in the prices of electricity, gas and other fuels in July was 4.5% year on year. Within electricity, gas and other fuels, the price of natural and manufactured gas fell by 9.3%, briquettes and coke by 4.5% and electricity by 2.1% over the past year. Prices of butane and propane gas were also 0.4% lower.
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.
