With most COVID-19-related support measures having been phased out, borrowers are now being put under pressure by surging inflation and sharply rising interest rates.
The chaos and the hike in prices are a huge embarrassment to Prime Minister Viktor Orban, who introduced the cap in November last year to ease rising inflation before the election.
Budapest has been holding up aid for Ukraine as well as EU approval of a minimum corporate tax as part of an attempt to unfreeze €7.5bn of Cohesion Fund money and €5.8bn of Recovery and Resilience Fund cash.
The global inflation crisis paired with lacklustre economic growth and an outlook clouded by uncertainties have led to a decline in real wages around the world, a new report published by the International Labour Organization (ILO) has found.
Annualised Hungarian retail sales growth slowed to 0.6% in October from 3% in the previous month.
Foreign investment will continue to have a vital role to play in the region’s development, particularly now that international companies are rethinking their supply chains.
Global investment in energy efficiency could rise by 16% to $560bn in 2022, the International Energy Agency said, as governments and consumers respond to fuel supply disruptions and record-high energy prices.
Adjusted for seasonal and calendar year effects, GDP grew 4.1% y/y, but fell 0.4% from the previous quarter.
Commission also recommends keeping €7.5bn of Hungary's Cohesion Fund allocation frozen until the country takes steps to address concerns over the rule of law.
Commission set to approve Hungary’s plans to use €5.8bn of post-pandemic recovery fund money but it is likely to recommend continuing the suspension of €7.5bn in Cohesion Funds.
A final decision – formal approval – on the new regulation may occur at another emergency meeting on December 13.
Among Europeans, the proportion of Hungarians blaming Ukraine for the war is the highest.
Hungarian premier Viktor Orban reiterated Hungary’s opposition to the EU’s efforts to raise cash for Ukraine on financial markets, and says its parliament will ratify Sweden and Finland's Nato membership in 'a month and something'.
Budapest said to receive RRF funds but €7.5bn of Cohesion Funds will remain frozen.
Euro sustainable bond issuance in 2023 is not likely to repeat the growth rates seen in the last few years. While governments and agencies could slightly accelerate ESG issuance in 2023, financial institutions' ESG bond supply will lose some steam.
Ukraine, Romania, Croatia, and Slovakia protested against the gesture, which comes at a time Hungary faces growing isolation in Europe.
The contraction in Ukraine’s GDP will be among the worst 10-20% of those in conflicts in the last 200 years, the development bank predicts in its 2022/23 Transition Report.
Development bank recommends countries should now gradually dial down help to vulnerable companies, so they can either learn to adapt to the new climate of higher interest rates or exit the market by going into insolvency.
Contrasting stances demonstrate differences within Czechia on how to respond to Budapest's collaboration with Moscow.
Consultancy says economy could face hard landing even if it convinces Brussels to release funding frozen over its abuse of the rule of law.