Foreign exchange market prospects for 2024: What can Hungarian SMEs expect?
In its foreign exchange market outlook for 2024 published this week, global foreign exchange and international payment service provider iBanFirst provides an overview of the expected main trends for the coming year, helping companies engaged in international trade to develop their foreign exchange risk management strategy for 2024.
Hungary is facing an increasingly challenging economic situation: by the end of 2023, recession is more and more certain, with a GDP decline of -0.4% in annual terms. The decline in domestic demand can be felt in all segments of the economy, especially in retail trade and the manufacturing industry. The reason for this is still high inflation. Despite the ongoing disinflation, core inflation is expected to reach 10% by the end of the year, and consumer spending does not show any recovery due to the still negative real wage growth. The good news is that the end of price controls for certain products is a positive turn toward faster disinflation, and concerns about EU-related political risks seem to be subsiding.
On the foreign exchange front, the Hungarian forint (HUF) attracted the attention of foreign investors at the beginning of the year. Still, given the changing economic background, a shift towards the euro is expected due to its stability. Since the Hungarian monetary policy will probably not greatly affect the EUR/HUF exchange rate in the near future, iBanFirst expects a possible reduction of the required reserve ratio in order to increase liquidity. Analysts predict that by the end of the second quarter of 2024, the exchange rate of the euro may reach HUF 400. iBanFirst also expects that EUR/HUF will gradually move from HUF 400 to HUF 415 by the end of 2024.
Related news
Here is NAV’s 2025 audit plan – new forms of audit, new areas in focus
The NAV 2025 audit plan has been published, in which,…
Read more >NAV President: the data reconciliation procedure further whitens the economy
The National Tax Office (NAV) will focus more on filtering…
Read more >GKI analysis: Hungarians will receive more than a trillion forints
In recent months, the Premium Hungarian Government Bond (PMÁP) has…
Read more >Related news
Margin is very much not profit
The government announced that it would introduce a margin cap…
Read more >Margin freeze in Hungary: Who is affected and is government intervention really justified?
The Hungarian government will introduce a margin restriction on certain…
Read more >China’s retail sales skyrocket in the first two months of the year
China’s industrial output grew 5.9 percent year-on-year in the first…
Read more >