K&H: What happened to the HUF? What would be needed in Hungary and what can be expected in Europe?
Despite the weakening of the forint seen in recent days, the euro may remain in the band between 385 and 400 forints this year. At least that is what Dávid Németh, K&H’s leading analyst, expects in the base case, i.e. if there are no significant changes in the world and Hungarian economy in the remaining months of the year. The specialist spoke about Hungarian inflation, the expected interest rate trajectory and the necessary adjustment, as well as the EU prospects.
For now, there is a lot of uncertainty about where the European Union will go after the EU parliamentary elections, but a few things are already visible. Many expected a significant strengthening of the extreme right, and the results showed that they had increased their weight – in France, for example, this political force won – but the significant breakthrough was missed.
One of the most important questions now is how far the EU will continue on a federal path. “This is partly important because of foreign policy and economic decisions, including the development of budgetary policy. In other words, there is a fiscal question mark as to how strict the member countries will be in this area. The costs are on the rise, partly due to interest expenses, but the aging of society is also a long-term burden, so sooner or later action must be taken,” said Dávid Németh, evaluating the elections held at the beginning of June. It is also difficult to say now how strong the green parties and green politics will be in the future, that is, it is questionable at what pace these efforts can be carried through.
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