Macro Monitor – March 2024


At its March meeting, the Monetary Council of the central bank continued to cut both the policy rate and the base rate, as it had done the previous month. As a result, the base rate (and the policy rate) in Hungary is currently at 8.25%, after a 75 basis point cut.

In January, retail sales increased by 0.6% year on year on both a raw and calendar-adjusted basis. Within this, specialised and non-specialised food retailing increased by 0.2%, while non-food retailing decreased by 0.9%. The turnover volume of petrol stations increased by 4.6% compared to the same period last year.

Measured up to February 2024, the value of the monthly SZIGMA CI indicator, which provides a snapshot of the current state of the Hungarian economy, was -0.197. This is a significant weakening from the previous month’s index value of -0.043. In other words, the Hungarian economy started to move away from its historical trend and continued to operate below its historical trend.

According to the latest projection of the other indicator, SZIGMA LEAD, which is a short-term forward-looking indicator for the future of the Hungarian economy, the growth path is projected to decline sharply by the end of the forecast horizon. Compared to last month’s forecast, the indicator projects a downward outlook.

In February 2024, consumer prices rose by 3.7% on an annual average basis.

This year and next will be marked by a slow recovery process

In 2023, the volume of Hungarian gross domestic product (GDP) fell slightly by 0.7%, while growth is likely to remain subdued in the following years. We expect Hungarian economic output to grow by 2.7% in 2024 and 3.4% in 2025. This year and next will be marked by a slow recovery process.

• 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.