Three new data reports (industry, retail sales, budget) and one data preview (CPI)

HUNGARY - In Brief 06 Oct 2026 by Istvan Racz

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Well, this is more good than bad, but not entirely good, we would say.1. Industrial output grew 1% mom, 8.7% yoy in August. This looks quite impressive on the fixed-base chart (Dec 2010 = 100) below, though it still does not reflect a broad-based upswing of industrial activity. The upturn was concentrated essentially on two areas, cars and IT hardware, just as in previous months. Other branches typically still shrank in terms of output.2. Retail sales dropped by 0.7% mom but grew 2.8% yoy in August. The yoy growth rate was still quite all right, but some weakening was evidently present in the summer months. Please, notice here that retail sales include purchases by incoming tourists as well. This could be easily an important, if not the main, source of weakness, given that incoming net tourism was hit by the strong forint this summer. In August, the euro was 6.8% yoy weaker against the forint, and that reduced the number of guests at local hotels by 7.3% yoy, with the number of guest nights down by 5.8% yoy. The latter implies that arrivals for a short stay dropped rather substantially.3. The central government's cash deficit reached 0.1% of GDP in September and 7.6% of GDP in January-September cumulative, all in annualised terms. The cumulative figure was down from 8.5% of GDP in January-August. Please, note that both figures were inflated by the HUF2187bn amount of RRF pre-financing, which took place and was accounted for in August. Net of that latter item, on the grounds that RRF reimbursements are expected to come in before end-2026, the cumulative deficit figures were 4.9% of GDP in August and 4.4% in September (still annualised figures). These go against 5.4% of ...