on the top?

Dávid Németh chief economist

27 November 2014

growth outlook

2

development of investments

stagnation of investment in 2015

annual growth rate of lending to non-financial corporates

how consumption may develop?

contribution to GDP growth (demand side)

Forrás: KSH, K&H

-8,0

-6,0

-4,0

-2,0

0,0

2,0

4,0

6,0

8,0

06Q1 07Q1 08Q1 09Q1 10Q1 11Q1 12Q1 13Q1 14Q1 15Q1

Household consumption Government consumptionGross fixed capital formation Net exportGDP

K&H Forecast

'14 '15

inflation

8

infláció a fejlett gazdaságokban

10

inflációs várakozások a régióban

-14,0

-9,0

-4,0

1,0

6,0

11,0

16,0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Regulated prices vs CPI

-6,0

-4,0

-2,0

0,0

2,0

4,0

6,0

8,0

10,0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Alcohol, tobacco vs.CPI

inflationary development

Forrás: KSH, MNB, K&H

market priced goods and services vs. CPI

alcohol, tobacco vs. CPI regulated prices vs. CPI

-2,0

0,0

2,0

4,0

6,0

8,0

10,0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Inflation evolution (YoY %)

CPI (YoY %) MNB Core (YoY %) CPI adjusted for tax changes Inflation target

K&H Forecast

-8,0

-6,0

-4,0

-2,0

0,0

2,0

4,0

6,0

8,0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Goods Food Trade gds Free services

capital markets

base rate in the developed countries (%)

0

1

2

3

4

5

6

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

BOJ BOE FED ECB

decreasing rate environment in the region (%)

Forrás: NBH. K&H, Bloomberg

0

2

4

6

8

10

12

2007 2008 2009 2010 2011 2012 2013 2014

Czech Republic Poland Romania Slovakia

the tables have turned

Balance sheet of major central banks (in own currency)

market environment development of IRS (%)

Forrás: K&H, Bloomberg

2

3

4

5

6

7

8

9

10

11

12

2007 2008 2009 2010 2011 2012 2013 2014

1-year 3-year 5-year 10-year

does develuation continue?

Forrás: NBH. K&H, Bloomberg

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

11,0

12,0

220

240

260

280

300

320

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

EUR/HUF base rate (rhs, %)

K&H Forecast

stability

18

changes in savings of sectors (% of GDP)

breakdown of net external debt by sectors (% of GDP)

gross public debt (% of GDP)

0

10

20

30

40

50

60

70

80

90

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Hungary Poland Slovakia Czech Republic Romania

gross public debt (% of GDP)

0

20

40

60

80

100

120

140

160

180

200

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Greece Italy Euro area United Kingdom Hungary Germany

duration of debt (year, average)

0

2

4

6

8

10

12

UK Greece Germany Italy Slovakia Poland CzechRepublic

Romania Hungary

who is dangerous?

UK

GR

GE

IT

SOPLCZ

RO

HU

20

40

60

80

100

120

140

160

180

4 5 6 7 8 9 10 11

gros

s pu

blic

deb

t(%

of G

DP)

duration of public debt (year, average)

correlation between corporate lending and non-performing loans

Forrás: NBH. K&H, Bloomberg

Bank1

Bank2

Bank3

Bank4 Bank5

Bank6

Bank7

Bank8Bank9

-60

-50

-40

-30

-20

-10

0

10

0 5 10 15 20 25 30 35

Exch

ange

rate

adj

uste

d ch

ange

in c

orpo

rate

loan

s ou

tsta

ndin

g be

twee

n D

ecem

ber 2

008

and

June

20

14 (p

er c

ent)

NPL ratio of corporate loans, June 2014 (per cent)

household foreign currency loans as a percentage of GDP in regional comparison

Forrás: NBH. K&H, Bloomberg

024681012141618202224

02468

1012141618202224 per centper cent

Bulgaria Czech RepublicHungary PolandRomania Slovakia

developments in the loan-to-deposit ratio in an international comparison

Forrás: NBH. K&H, Bloomberg

60

70

80

90

100

110

120

130

140

150

160

60

70

80

90

100

110

120

130

140

150

160

Dec

-07

Mar Jun

Sep

Dec

-08

Mar Jun

Sep

Dec

-09

Mar Jun

Sep

Dec

-10

Mar Jun

Sep

Dec

-11

Mar Jun

Sep

Dec

-12

Mar Jun

Sep

Dec

-13

Mar

Jun-

14

HUF BnHUF Bn

Hungary Poland Slovakia Romania Bulgaria Czech Republic