Secondary market yields of Hungarian government securities dropped significantly in the past six months and they declined on average to pre-crisis levels of autumn 2008 or regarding certain tenors even below that. The yield curve comprised of averages of yields from Q2 2012 has been rising after the pre-crisis declining pattern which may also signal the onset of economic growth recovery. In addition, auction results observed recently similarly indicate that yields on the government securities market have stabilized at a pre-crisis level.
The global economic crisis has demonstrated that the debt outlook of most of the EU countries is unsustainable and several states need to carry out adjustments regarding their general government debt-to-GDP ratios and fiscal deficits.
According to data published on 9 August by the Hungarian Central Statistical Office (KSH), in June 2012 foreign tourist traffic on the basis of the number of tourism nights increased by 1.9 percent in Hungary compared to the same period of the previous year.
According to the latest data on foreign trade by the Hungarian Central Statistical Office (KSH), all preliminary statistics signal that after May foreign trade turnover increased again in June. Calculated in euro (at current prices) exports were up by 5.6 percent and imports increased slightly less by 3 percent compared to the same period of the previous year, while in comparison to May 2011 both indicators were 0.3 percent higher (according to seasonally adjusted data).
According to the latest Hungarian data published by the Hungarian Central Statistical Office (KSH), in the country the number of employed in the second quarter of 2012 averaged 3 million 876 thousand which has been the best figure of the past couple of years. Compared to the same period of the previous year, the number of people who had managed to get a job thereby increased by 67 000. The below chart shows the change in the number of employed over time.
According to the CMA Datavision ranking of the second quarter of 2012, Hungary is no more among the world top 10 of highest risk countries and it has achieved the second best improvement compared to the risk perception of the previous quarter. The favourable result has been primarily due to the introduction of the Széll Kálmán Plan 2.0 and the positive developments with regard to the EU/IMF negotiations.
According to the latest release of the Hungarian Association of Logistics, Purchasing and Inventory Management, the seasonally adjusted Purchasing Manager Index (PMI) regarding Hungary in the month of June registered a remarkably impressive figure of 52.8 points. This reading implies expansion of the manufacturing sector, as it is well above 50 points which indicates stagnation (a PMI reading above 50 points signals expansion of the sector and a figure below 50 points means contraction).
The government is set to launch a 10-point job protection action plan which aims to improve the situation of disadvantaged employees, jobseekers and enterprises. The primary objective of this package of measures is to create and preserve existing jobs as one of the keys to the economic growth of Hungary. The budgetary resources required for the action plan will be provided by the financial transaction duty.
Each year since 2007 the Institute for Economics and Peace (IEP) publishes a composite index which they define, the Global Peace Index (GPI), that ranks Hungary in 2012 as the very impressive third in the region. According to the latest GPI, Hungary was placed as 17th on a list which consists of 157 countries.
In the past couple of months in the midst of a protracted financial-economic crisis the government implemented structural reforms by which state budget balance was made sustainable and general government debt was also set on a downward path. Due to the fiscal trend reversal, the deficit will certainly and steadily remain below 3 percent, consequently next year the Hungarian economy will begin to expand on the basis of firm fundamentals. The Budget Bill of 2013 submitted to parliament on 15 June by the government sets a deficit target of 2.2 percent which – via one of the most stable fiscal management policies of Europe – will adequately respond to the challenges imposed by the debt crisis.