Hungary Real Estate Market View

Hungary’s economy outperformed the EU countries in 2022, despite geopolitical uncertainty and disruptions in the global supply chain. The data for the third quarter is encouraging, the Hungarian GDP growth reached 4.0% according to CSO. In accordance with the latest results, the OECD raised Hungary’s 2022 GDP forecast to 6.0% in its semi-annual Economic Outlook. However, according to expectations, Hungary’s GDP growth will slow down to 1.7% in 2023 which is still one of the highest rates in Europe. 

Hungary is exposed to the volatility of Hungarian currency and high inflation. Consumer prices rose by 21.1% in October 2022, one of the highest values in Europe. Food prices (by 40% y-o-y) and household energy prices (by 64.4% y-o-y) rose the most. In the short term, private consumption will likely be restrained by increased inflation and fear of unemployment. We already saw a sign of slowdown in August, when retail sales increased only by 2.4% compared to the same period of the previous year, however, retail turnover in the period between January and August 2022 exceeded the retail volume in the same period of 2021 by 8.4%.

The Hungarian Government decided to keep the price caps for households and expand it with additional items such as eggs and potatoes. The caps for vehicle fuel and some food prices have been extended until 31 December, the loan moratorium and the mortgage interest rate caps will remain in effect until 30 June 2023. According to representatives of the MNB, the monetary policy must remain stringent until the risks are reduced, therefore the 13% base interest rate may remain in effect in the longer term. 

Industrial production has shown resiliency in the past period. In September, industrial output in Hungary increased by 11.6% compared to the previous month’s 9.1% increase - according to the data of the CSO. In the January-September period, output grew by 6.7% on an annual basis. The performance of the automotive industry, as well as the computing, electronic and optical equipment sectors showed robust growth. 

Tourism revenues increased strongly in the summer months. The number of guest nights spent in commercial accommodation in January - August 2022 increased by 70%, compared to the same period in 2021. Despite the geopolitical uncertainty, the number of guest nights spent by foreigners surged drastically by 200%. Due to the lifting of restrictions and the pandemic entering the endemic stage, tourism was able to return to its great performance. 

Employment data remained stable, the unemployment rate was 3.6% in October, which is lower than the previous month’s 3.8% and the 3.9% 12 months earlier, according to CSO. Real wages were able to grow, although due to inflationary effects, they registered a 15.3% increase in July 2022 compared to the same period of the previous year. 

27 Oct

The 2022 Q3 market statistics have just been finalised. Accordingly, the Budapest office market performance shows clear signs of recovery from the years affected by the pandemic. Whilst the general business sentiment has worsened in August and September primarily due to surging energy prices, total office demand in Budapest increased by a significant 24% compared to the same period in 2021, and in a quarterly comparison it reached almost the same volume. Quarterly demand was primarily driven by the professional and public sectors. As a further positive development, we see that the average size of registered transactions has almost doubled compared to the same period of the previous year. New developments with high occupancy level continue to arrive on the market and in the last quarter of 2022, we expect another 108,000 sq m of new office space to be delivered. With that, new supply could reach 300,000 sq m in Year 2022.

The Hungarian logistics market performed strongly in the third quarter, and market fundamentals remain healthy despite global supply chain disruptions and surging energy prices. In addition, total demand reaching 218,000 sq m was up 52% compared to the same period in 2021 and YTD demand was up 15% following an exceptionally strong 2021. New supply hit a new record in this quarter as 145,000 sq m of new space were added to Greater Budapest Area. Despite the volume of new supply already delivered, current availability is limited, and the development market remains active, proving that Hungary has strong growth potential.

According to the latest data published by CSO, the total retail turnover in January - July 2022 exceeded the same period of the previous year by 9.3%. Online retail grew by 8%, whilst its current share fell to 8.3% from 9.5% last year. Moreover, physical retail sales (excluding petrol) increased significantly by 15%, proving that demand for physical retail is constant. New supply on the Hungarian retail market remained moderate in the third quarter of 2022. The stock was expanded with a smaller new retail park and the reopening of refurbished schemes such as GOBUDA and Campona is ongoing.

Due to elevated inflation pressures and the weak currency, the cost of construction continues to rise significantly therefore headline rents of new schemes are likely to grow further in all sectors of the property market. Service charges for both new and existing schemes are also rising, primarily due to drastically increased energy prices. 

23 Sep

As of 20 September, the number of daily cases has continued to increase, over the weekend 1,070 new cases were registered. Compared to the 7-day average of 200 new cases measured at the beginning of September, this is a stronger increase. With the increasing numbers, the share of people wearing masks in shops and on public transport have clearly increased. The vaccination campaign focusing on children between 12 and 17 years of age, which started before returning to schools is strong and still ongoing. In addition, a high rate of people between the age of 18-19 have registered for the vaccination and nearly 60% of this age group have been fully vaccinated according to the coronavirus press centre. 

The number of nights spent by domestic guests in commercial accommodation increased by 8.1% in July compared to the same month in 2020 but was 11% lower than in July 2019, as recently published by the CSO. The number of nights spent by foreign guests increased by 16% compared to July 2020 indicating a slight recovery of tourism during summer whilst compared to 2019, the decrease amounts to 70%. Until February 2020, the Budapest hotel market had experienced significant growth, hence was one of the most impacted hotel markets in Europe. According to Oxford Economics, the overall travel demand to Budapest is expected to reach the pre-COVID levels by 2024. 

25 August

As of 23 August, the number of new cases over the weekend had increased to 340, mostly fuelled by the Delta variant of the virus, indicating the early signs of a fourth wave starting. Nearly 57% of the population is vaccinated and registry for the third dose of the vaccine is now available.

Increased activity can be experienced around the retail market, both from the consumer and developer side as footfall has increased to levels not seen since the appearance of the virus in Hungary according to the Mobility Report published by Google and retail sales have also increased by 1.2% y-o-y in January-May 2021 according to the Central Statistics Office. Online sales have seen a boom with a share of 9.2% by the end of May, however the brick-and-mortar shopping experience is still dominating the market. 

From the development side, after 8 years of no new shopping centre deliveries, Etele plaza will open in September with a GLA of 55,000 sq m. Landlords of existing centres have also started full refurbishments with a strong focus on F&B and leisure elements. Examples include Euro Center, Campona Shopping Centre or the former Corvin Áruház. Other schemes in the pipeline include smaller retail park developments.

11 August

As of 9 August, the 7-day average of daily new cases remains below 100, which corresponds to the lowest level since the appearance of the second and third waves of COVID-19. The Hungarian economy demonstrated resilience to these waves of the pandemic-induced restrictions, and economic performance has therefore shown improvement by the end of H1 2021. According to Moody’s Analytics forecasts, a solid rebound is expected from now onwards, greatly supported by one of the fastest vaccination rollouts in the EU. 

The industrial production and exports have strongly rebounded, and even exceeded pre-pandemic levels by April 2021. As a result, the industrial confidence index published by EUROSTAT has strongly improved. It is expected the industrial sector will grow by 13.5% this year and 7.3% in 2022 respectively. 

Q2 industrial numbers are finalised as well. Increased market activity with record high demand level is now evidenced by the dominant share of pre-lease transactions on the Budapest logistics market reaching 62% of the total take-up. Demand in Q2 equalled 172,700 sq m and the main driver was net take-up amounting to 148,980 sq m, including mostly pre-leases rather than new leases and expansions. The share of renewals was 13% amounting to 23,760 sq m. A significant amount of new supply was delivered to the market in Q2 including four new buildings and amounting to 117,800 sq m. The delivery of speculative stock in Q2 has pushed vacancy rate up by 1.4 percentage points, reaching 4%. 

27 July

As of 26 July, both the number of active and hospitalised cases remain at their lowest level since the appearance of the third COVID-19 wave, despite the gradual lifting of restrictions. Neighbouring countries have experienced some increase in the number of daily new cases on account of the spread of new virus variants, which might soon appear in Hungary. Nearly 56% of the population is fully vaccinated corresponding to one of highest vaccination rates in the European Union. 

Q2 office KPI’s recently published by the Budapest Research Forum have indicated signs of recovery. Total demand has reached 98,000 sq m, which is the highest level since the appearance of COVID-19 in Hungary and shows a quarter-on-quarter increase of 31% and a year-on-year increase of 11% respectively. Net take-up has dominated the market by a take-up share of 60%, whilst the remaining 40% was represented by renewals. 

Vacancy rate has continued to increase and currently stands at 9.8%. Whilst this represents a 0.8 pps uptick quarter-on-quarter and a 2.5 pps increase year-on-year, the overall Budapest vacancy remains below the 10% threshold.  New supply is continuously delivered to the market with several larger pre-lease transactions closed in this quarter, including the significant deal of IBM signing in the ongoing Corvin Innovation Campus development.

13 July

As of 12 July, the number of daily new cases remained under 40, being close to record low levels since the third wave of the pandemic reaches its end in Hungary.  

Once 55% of the population received a vaccination Hungary saw a further easing of lockdown measures. This includes the optional use of face masks on public transport and in retail stores. 

Retail sales were reaching pre-pandemic levels in April and May 2021 and according to CSO, total retail sales showed a growth of 1.0% y-o-y in Jan-May 2021.  

Online sales have seen a significant increase: at the end of May the share of online reached 9.2% which represents a strong growth rate of 13% on what was a strong 2020 level.  

Primarily reflecting the continued weakening of the local currency, headline inflation has been above the central bank’s medium-term target of 3% since February 2021.  

In May 2021 inflation rate has increased to 5.1 % compared to the same period in 2020.  

June 2021 inflation rate stands at 5.3%, which is the highest registered level since 2012.  

Whilst inflation is expected to stay elevated, Moody’s analytics anticipates the inflationary pressures will subside gradually, moderating to around 4.4% in 2021 and 2.7% in 2022. 

01 July

As of 28 June, the number of daily new COVID-19 cases for the last three weeks has remained under 200, showing that in Hungary, the third wave of the virus has reached its lowest point and seems to be ending.  

Nearly 55% of the population has received the first dose of the vaccine and 49% has received the second dose as well.  

The next phase of measurement easing will take effect once 55% of the population is vaccinated; when mask wearing in retail shops and on public transport will be optional and hotels can be visited freely, without an immunity certificate. 

Regarding tourism, the number of guest nights has seen an increase of 70% year-on-year in April. 

This might seem like a significant increase, however guest nights only reached 81,000 in April 2020 during the first lockdown period, and current numbers are still below pre-Covid levels.  

We reached the start of the recovery period in May and with the almost full reopening of hotels, concerts and public sport events, we expect that tourism will experience a boom during the summer period.   

The inflation rate in May increased to 5.1% compared to May 2020.  

The two main product categories where consumer price change was the highest include vehicle parts (13.4%) and fuels and tobacco products (12.2%).  

Other product categories like groceries and clothing have seen a more moderate increase in consumer price with 2% and 1%. 

14 June

As of 14 June, the number of daily new cases is gradually decreasing.  

During the last week, the number of daily new cases only amounted to 112.  

Hungary is still second in the EU vaccination rankings.  

Currently 54% of the total population received the first dose of the vaccine and 42% received the second one as well.  

Children between the age of 12-15 can now be registered for the Pfizer vaccination.  

Due to the significant easing in Government restrictions since the end of April, footfall in retail and leisure is experiencing a strong improvement reaching levels not seen since the appearance of COVID-19 in Hungary - according to COVID-19 Community Mobility Report by Google.  

The same report also shows that office use has increased close to baseline level, indicating that people are returning to the office in Budapest but with 1-2 days a week still spent working from home.  

In April 2021, the volume of industrial production was 58.8% higher than the extremely low base level of April of the previous year, which was related to the restrictive measures taken - according to CSO data.  

Even though this difference is mainly due to the record low level seen last year, industrial production has also increased if compared to 2019 levels.  

Inflation however has increased to 5.1% in May, showing its highest level since 2012. 

02 June

As of 1 June, the third wave of the pandemic subsided in Hungary as both the number of deaths and hospitalised cases have been declining for the last few weeks. The number of daily new cases currently stands at the lowest level since last September and remains under 350 for the last three days. Vaccination is ongoing, currently 53% of the Hungarian population is vaccinated, which is currently ranked second highest in the EU. Nearly 37% of the population is fully vaccinated. 

Restrictions were further eased following 50% of the population having received at least one dose of the vaccine. Curfew is now fully lifted, whilst mask wearing regulations, mainly focusing on indoor areas (shops, public transport) are still in effect. Retail and F&B units have gradually reopened under normal shopping hours, but with a capacity limit to be applied indoors. In response, Hungary has experienced a major bounce back in footfall as indicated by Google’s mobility report that the mobility to retail & recreation has been returning to pre-COVID levels. Whilst brick-and-mortar shopping experiences still dominate, e-commerce has experienced a boom with online sales rocketing up to 10.5% in Q1 2021 representing a growth rate of 30% y-o-y.

New supply in Q1 2021 included a 11,000 sq m retail park scheme in Kaposvár, developed by SES. Development pipeline for 2021 includes 4 smaller retail park schemes in a total of 18,000 sq m GLA and, one large shopping centre scheme of the 55,000 sq m Etele Plaza. In addition, several ongoing shopping centre refurbishment projects are in the pipeline including Campona and EuroCenter with the forecasted hand-over of early 2022.

According to surveys conducted by GKI, the sentiment indicators have recently shown continuous improvement, with the Business Sentiment Index reached pre-pandemic levels in April.

24 May

As of 17 May, the number of daily new cases stands at 718 and the 7-day average of new cases remains under 920, both showing a steep decrease from the late March peaks. This indicates that the third wave of the pandemic has now taken a downward turn. Vaccinations are in progress with 4.6 million people vaccinated at least once. This corresponds to a vaccination rate of 47.5% which is one of highest in the EU. Also, nearly 27% of the population is fully vaccinated.   

As restrictions are gradually lifted, an effective vaccine is deployed, and global trade picks up, domestic and external demand are expected to recover from mid-2021 onwards. The GKI Business Sentiment Index shows further improvement and has already reached its pre-pandemic level in March 2021. The current occupier sentiment should follow this improvement in accordance with the recently announced easing of lock down measures and the forecast Budapest employment growth in 2021.  

Office demand in Q1 was dominated by net take-up and remained close to its pre-pandemic 5-year average, whilst pre-leases were pulled back. The net take-up has reached 37,300 sq m while renewals amounted to 36,300 sq m. A total new supply of 24,700 sq m was delivered to the market of which only 10% was speculative space. Availabilities have slightly decreased, and net absorption remained positive. New supply for 2021-2022 remains constrained with a projected pipeline of 426,000 sq m and a pre-let status of 45% as at the end of the quarter. Development activity will be focused on South Buda and Central Pest submarkets in 2021. Prime headline rents remained firm, yet incentive packages are expected to increase further this year. 

5 May

As of 3 May, the number of daily new cases stands at 1,590 which shows a steep decrease to one-fifth of the amount tracked the week before. The current surge peaked on 27 March, whilst the 7-day average of new cases now remains under 2,000. Vaccination is in progress with four million people already vaccinated at least once. This corresponds to a vaccination rate of 41% which is one of highest in the EU. In addition, nearly 21% of the population is fully vaccinated.   

Consequently, a gradual reopening is ongoing. Terraces of restaurants and bars were fully reopened on 24 April. The indoor premises of these services along with cinemas, theatres, spas, gyms, swimming pools, museums, libraries and sport events that have been closed since the beginning of November 2020 were reopened as of 1 May. Hotels are reopened and awaiting guests. All these services can only be used by individuals with an immunity card, which are issued one week after vaccination. Curfew restrictions have also been eased with services closing at 11pm and people must arrive home before midnight. Starting from 17 May, schools will reopen for higher grades. Teenagers between the ages of 16-18 can now register for vaccination starting on 10 May. 

20 April

Consequently, a gradual reopening is ongoing. Terraces of restaurants and bars were fully reopened on 24 April. The indoor premises of these services along with cinemas, theatres, spas, gyms, swimming pools, museums, libraries and sport events that have been closed since the beginning of November 2020 were reopened as of 1 May. Hotels are reopened and awaiting guests. All these services can only be used by individuals with an immunity card, which are issued one week after vaccination. Curfew restrictions have also been eased with services closing at 11pm and people must arrive home before midnight. Starting from 17 May, schools will reopen for higher grades. Teenagers between the ages of 16-18 can now register for vaccination starting on 10 May. 

As of 19 April, the number of daily new cases has gradually started to decrease from its peak of 9,000, measured in mid-March when the third wave of the COVID-19 pandemic hit the country to 4,300 (7-day average) now. Vaccinations are ongoing with currently more than 30% of the population vaccinated at least once and 14% of the population is vaccinated fully.

The lockdown measures have been somewhat eased, with curfew remaining in effect from 22:00 to 05:00 only and services such as hairdressers and beauticians are reopening under strict health protection measures.

Kindergartens and lower grades of elementary schools have reopened from 19 April. Higher grades, high schools and universities however remain closed and stick to online studying. Retail units including fashion stores and other non-essential stores have reopened with mostly normal shopping hours, but under a capacity limit to be calculated on a square metre basis. This limitation is also present in the before mentioned non-essential stores and most grocery stores as well. The regulation determines the maximum number of people allowed inside and must always be applied. Restaurants are currently functioning only with take-away and home delivery services, however possibly from May, units that have a terrace maybe allowed to reopen. 

9 April

As of 6 April, the third wave of the COVID-19 pandemic is still raging with the number of daily new cases ranging from 7,000 to 9,000 in recent days. During the Easter holiday period, the number of daily new cases has dropped, however this could be a result of people staying at home and fewer people being tested. Vaccination is ongoing and currently 24.2% of the population is vaccinated. When it reaches 25%, a gradual restart will occur. 

The restrictions regarding only essential shopping services that were implemented on the 11 November will be changed on 8 April. Previously shopping hours were limited to 19.00. However, from 8 April, this arrangement will be extended until 21:30. Retail stores, including those that have been closed since 8 March, may open under new square metre-based rules. On average, there can be 1 customer per 10 square metres in the store under the new regulations. Following the vaccination of teachers, schools and kindergartens will reopen on 19 April.

The general governmental balance has decreased by 6.0% as a proportion of GDP, compared to the previous year. The significant deterioration is a consequence of the economic effects of the COVID– 19 pandemic and the measures taken to mitigate them. 

25 March

As of 8 March, the 7-day average of daily new cases exceeded 5,300 showing that the third wave of the COVID-19 pandemic has hit the country hard. Whilst the number of daily new cases has already reached the peak measured during the second wave, vaccination is ongoing and currently stands at 9% of total population (vaccinated with at least one dose).  

The partial lockdown declared in early November is still in effect, but further restrictions have come into force for the period of 8-22 March. These restrictions include the closing of all non-essential retail and services. Kindergartens and elementary schools have again shifted to online schooling. Grocery stores, pharmacies and other essential services including private healthcare and financial institutions remain open.

Until coronavirus hit, the Hungarian economy had not seen a contraction since 2012 and consistently outperformed the Eurozone in terms of GDP growth, with a 10-year average rate of 2.1% against the Eurozone’s 0.5%. Following the first wave, Hungary bounced back through GDP growth of 9.8% in Q3 2020, exceeding expectations. However, the second wave of COVID-19 had a significant impact and further lockdown measures have been implemented. This has led to a fall again in Q4 and according to the CSO figures GDP fell by 6.4% in 2020. Recovery rate according to the World Bank in 2021 is forecast at 3.8% followed by 4.3% in 2022. The unemployment rate stood at 3.3% in 2019 and increased to 4.2% in 2020, well below the Eurozone’s 8.1%. This is expected to slow down the rapid wage growth and lead to a decline in consumption. Nonetheless, consumption is expected to recover at 5.7% by 2022. 

24 February

As of 22 February, the number of daily new cases has exceeded the 2000 cases mark per a 7-day average. Whilst this is below the average number of daily new cases measured during the second wave, it shows an increasing trend since mid-January. Vaccination is ongoing and stands at 5% of total population (vaccinated with at least one dose), and is currently focused on the elderly or those suffering from chronical illness. The partial lockdown declared in early November is still in effect until 1 March. 

Prior to the COVID-19 pandemic, retail sales grew at an average rate of 6.3% per annum in the period of 2016-2019. According to CSO figures, the total retail sales (excluding fuel) improved by 1.7% in 2020 in Hungary, well exceeding expectations with private spending on food (+3%) and medicines (+5.2%) further improving. Online sales rocketed up to 9% by year-end, which represents a growth of 40% y-o-y and should exceed 10% by 2022 even assuming it reverts to pre-COVID growth rates.  

Hungary implemented a total store closure in April and partial lockdown from November 2020. Currently, retail schemes operate under reduced hours, whilst cinemas, theatres and fitness centres all fully closed. F&B can only accept take-away orders. Still, Hungarian shopping centre and retail park schemes, that chiefly cater to the local market, proved to be resilient during the pandemic. In addition, Hungary has a comparatively strong position as shopping centre saturation is significantly below the levels of Western Europe or CEE capital cities.  

10 February

As of 8 February, the number of daily new cases is now, on average about 1,000 per week. In comparison to the first lockdown, this is a significant decrease, as during the period highlighted, this number reached an average of 5,000 - 6,000. The partial lockdown declared on the 4 November is still in effect until the 1 March. Vaccination has started with front-line workers and elderly people. 

2020 year-end results from the office market show that market activities were down by 52% y-o-y last year due to a generally slower market activity. Nevertheless, the net take-up constituted most of all leasing transactions and despite the challenges vacancy remained below the critical 10% threshold, at 9.1%. New supply is not overbearing and with this, confidence remains that Budapest will bounce back strongly in 2021.  

The industrial sector is experiencing record high demand levels with an increase of 29% y-o-y, driven by new relocation transactions. Vacancy rate decreased further and with pipeline projects already having high pre-let rates, there isn’t much vacant area on the market. Due to the strong expansion of online sales in 2020, we have registered growing interest from CEP (courier, express and parcel) and e-fulfillment centres. 

26 January

As of 25 January, the number of daily new cases has started to show a downward trend in recent days. This number is at times below 1,000. 

The State of Emergency declared on the 4 November is still in effect until 1 February, but many speculate that this will be further extended.. Some restaurants have already heard rumours, that there will be no easing until at least May. The Government is discussing the topic this week. Speculations say that the easing of the State of Emergency can start when about 5 million people (half of the country) is vaccinated but the distribution of vaccines is not as rapid as expected. A vaccine delivery for 36,000 people will arrive at the beginning of the week so a boost might be experienced in the number of vaccinated people. 

The Q4 2020 numbers for the office and industrial sector have been finalised, with this we have a clear picture of the 2020 total statistics. These numbers show that market activity was lagging behind the usual annual trends, but it also shows that there is still demand on the market and several larger transactions took place this year.   

14 January

As of 11 January, the number of daily new cases are experiencing a constant change. There are occasions when this number reaches around 5,000 new cases but in recent days a steady decrease was observed.

The State of Emergency declared on the 4 November is still in effect until the 1 February, but many speculate that the emergency will be extended further. Following EU standards, the distribution of vaccines has already started but many worry that the pace of the distribution is too slow. The first wave of vaccinated individuals will be those who are ‘fighting on the front line’, including doctors, social workers and nursing home workers. Schools, high schools and universities are still closed and focus on online teaching. The lower grades of elementary schools are open with the obligatory use of face masks. Teachers are constantly tested.  

Hungary is still finalising the December property market data, but it looks like that the retail sector experienced a boom in November and December, most probably thanks to the holiday season. Turnover of retail stores have decreased by 0.8% on a yearly basis in November but increased by 1.1% in quarterly basis.  

The volume of internet retail that took out 12% of the total turnover has increased by 43.2% on a quarterly basis in November.   

9 December

As of 7 December, the number of daily new cases has somewhat decreased to 3,800 from the average November numbers when the daily new cases had reached around 5,500.

The State of Emergency declared on 4 November is still in effect. On 11 November a partial curfew was introduced whereby between 20.00 and 5.00 everybody is required to stay indoors, whether at home or in accommodation. On 7 December, this curfew was declared to be in effect until 11 January. The only exceptions are for commuting to and from work, and for health emergencies. Public parks, shops, shopping centres, and markets are open. Shopping hour restrictions for elderly people is in effect once again, between 9.00 and 11.00. Restaurants are restricted to home delivery and retailers must close at 19.00. A general ban is in place for all events.  

During the summer, the inflation rate was nearing 3%, and because of this the Central Bank had its worries about tightening in the future. In the autumn, upward pressure on prices eased, so inflation rate reached the middle of the Central Bank’s target band. 

The Hungarian Banking Associate introduced several changes regarding banking administration, shifting it to electronic banking administration. This shift will significantly decrease personal activity - especially beneficial in the current situation. 

11 November

As of 9 November, the number of daily new cases continues to increase reaching more than 5,000. Further restrictions have already been implemented or recently announced, as follows: 

As of 4 November, a State of Emergency went into effect and as of 11 November, a partial curfew is in effect for a minimum of 30 days whereby between 8.00 and 17.00 everybody is required to stay indoors, whether at home or in accommodation. The only exceptions are for commuting to and from work, and in case of health emergencies. Public parks, shops, shopping centres and markets are open. Restaurants are restricted to home delivery and retail must close at 19.00. A general ban is in place for all events.  

Secondary and higher education must be switched to online, and university dormitories must close, whilst nurseries, kindergartens and elementary schools for under 14-year olds may stay open. Healthcare workers, nursery, kindergarten and school workers will be tested weekly. Open air individual sports are allowed, but amateur team sports are banned. Leisure such as fitness clubs, closed swimming pools, theatres, museums and zoos must close.  

Hotels can be open to business travellers, but all leisure bookings must be cancelled. The Government will reimburse 80% of all bookings cancelled for 30 days if hotel workers have received their salaries and their employment has been continuously upheld. Restaurants and leisure businesses will receive a 50% contribution to their employees’ salary and will be exempt from salary contributions for the period of emergency. 

27 October

As of 26 October, the number of daily new cases continues to increase, reaching over 3,000. Further restrictions are in discussion, as some of the new restrictions are different to certain governmental decrees previously issued in September. Blanket visiting bans for hospitals and retirement homes remains in effect. As of 23 October, people must wear face masks in open-air public gatherings as well.

The Government has introduced a programme, which starts from 15 October, that will be beneficial to jobseekers below the age of 25 and young people with a low level of education. The Hungarian Government is supporting this programme with €31 billion, mainly offering employment in the manufacturing and construction industry. This is only an initial push, the further aim of this programme is to develop mentoring programmes, beneficial to both companies and young people.  

The volume of construction output, according to raw data, was 13.6% lower than the previous year. The production of both main groups of construction decreased: by 17.1% for buildings and by 8.9% for other construction. Based on seasonally and working day adjusted indices, construction output increased by 1.9% compared to July this year and by 11.1% compared to the low in May. 

15 October

The past two weeks have seen a rise in the number of infected cases, as of 12 October, the number of daily new infected cases reached around 1,100 with some 33% of the cases registered in Budapest. Other coronavirus hotspots have started to appear in the countryside. Further restrictions have not yet been introduced, social distancing measures and blanket visiting bans for hospitals and retirement homes remain in effect.  

In September the GKI business sentiment index improved considerably from its April low, albeit downsizing plans feature in the business sector with decision making processes remaining slow. In line with the global trend, Q3 demand levels in the Budapest office market are expected to be restrained compared to the same period in previous years which were dominated by renewals. As new supply is continuously delivered to the market, the vacancy rate is expected to further increase from its record low level measured at year-end 2019.

Ongoing development schemes continue, and no major delays are reported. Indeed, Q3 alone has seen 60,000 sq m of new space coming to the market. Pipeline for the period of 2020-2022 shows an increased level compared to the amount seen in the last ten years. The impact of WFH in Budapest remains to be seen on future demand and design. Large-scale transactions, however, have proceeded over the past months and we see examples of large occupiers committing to long term leases as the Budapest market remains attractive for large SSC / BPO business. In addition, we have registered new potential market entrants in Q3. 

30 September

The second wave of COVID-19 reached the country earlier this month. Restrictions on entering the country imposed from 1 September remain in place and the wearing of face masks remains mandatory on public transport, in cinemas, theatres, health and social institutions and public offices. Bars and restaurants must close at 11pm. The blanket visiting ban for hospitals and retirement homes have been put in place again. 

In schools, if infected cases are discovered, the whole class is shifted to online schooling. From 1 October, only teachers and students will be allowed into school buildings and will be required to undergo temperature screening upon entry. 

The Hungarian economy fell by 14.5% in Q2 of 2020, clearly the impact of the lockdown and closure of a large part of the economy. Industrial production has fallen by 27% in Q2, but it has recovered strongly in the summer as manufacturing plants, especially in the auto sector restarted production. In Q3 a sharp bounce in activity is expected and GDP is now forecast to fall by 6.3% in 2020 before bouncing back to grow by 6.2% in 2021. 

Longer term, Hungary is expected to benefit from the recently agreed Next Generation EU recovery fund and the EU’s next Multi-annual Financial Framework (MFF). In total, according to estimates from Oxford Economics, Hungary will receive some €8.6 billion in grants from the recovery fund over the 5 years to 2025 which will provide a stimulus to the Hungarian economy equal to some 6.7% of GDP in 2021-25. The timing of the investment driven by these funds is difficult to predict, but GDP is expected to grow by 5.9% in 2022. 

16 September

As of 14 September, containment measures are still lifted in Hungary, but with the number of daily new cases exceeding the numbers of April and exponentially increasing, we can assume that Hungary has reached the second wave of the COVIC-19 epidemic. Border control restrictions are still in effect, anyone who enters the country must present a negative COVID-19 test or go into a 2 week-long quarantine. 

There are general rules for physical distancing of one and a half metres which must be kept between individuals. The use of a face mask in shops, on public transport and in taxis is mandatory. A penalty of €20 can be imposed if someone is seen not wearing a face mask on public transport.

Most schools have opened on time and are generally focusing on making up for the shortfall caused by the spring lockdown. All schools that have reopened operate under strict safety measures, but these measures and reopening protocols can vary between different schools, as some stick to online education with limited practical classes. 

Public areas like restaurants, cinemas, theatres and bars can be still visited, but employees must wear face masks. Open-air events can also be held with safety restrictions such as, spectators should occupy only one of every four seats and do not sit directly behind each other.  

3 September

As of 1 September, containment measures are still lifted in Hungary, but with the number of daily new cases approaching the numbers of April, Hungary might be nearing the second wave of the COVID-19 epidemic. Border control restrictions are temporarily re-introduced, foreigners cannot enter the country and Hungarian residents must also go into a 14-day quarantine or provide two negative COVID tests. Liszt Ferenc airport in Budapest remains open.

There are general rules for psychical distancing, one and a half metres must be kept between individuals and the use of a face mask in shops, on public transport and in taxis is mandatory. The frequency of public transport operations has increased as schools are beginning the new year. Most schools have reopened as of 1 September, with safety measures continuously in effect, but these measures and reopening protocols can vary between different schools, as some stick to online education with limited practical classes.

Public areas like restaurants, cinemas, theatres and bars can be visited, but employees must wear face masks. Open-air events can also be held with safety restrictions such as, spectators to occupy only one of every four seats and may not sit directly behind each other, however, mass events of more than 500 people remain banned indefinitely. 

19 August

As of 17 August, the containment measures are still lifted in Hungary. Public events above 500 participants, however, are cancelled for August. The red-yellow-green colour coding system that was introduced in mid-July is still in effect. Under these rules, anybody entering from high risk countries listed as ‘yellow’ and ‘red’ would have to go into 14 days of quarantine or need to provide two negative COVID-19 tests. PSR tests are self-financed from 1 August.  

According to the CSO first GDP estimate published on 14 August, the economy has dropped by 13.6% year-on-year in the second quarter, which is worse than previously expected. Headline inflation accelerated to an annual 3.8% in July, whereas MNB targets a headline inflation of 3%. The MNB has cut its base rate in June and July by a total of 30 basis points, to 0.6% and started a bond-buying programme. The next rate-setting meeting will be on 25 August. Nonetheless, according to Oxford Economics a contraction of 5.0% expected for 2020. In the absence of further significant COVID-19-related shocks, a recovery can start from H2 this year and Hungary's economy will rebound and reach pre-pandemic real GDP levels by early 2022, sooner than most other CEE economies. Credit rating agencies including S&P and Fitch have affirming their sovereign credit ratings with a stable outlook.   

5 August

As of 3 August, the containment measures are still lifted in Hungary. The red-yellow-green colour coding system that was introduced recently is still in effect. Since the neighbouring country Croatia is marked as green, many Hungarians tend to travel there as a vacation destination. Last week, the Government announced that any public events above 500 participants are cancelled for August.  

The Hungarian Government, together with the MNB, has announced a large amount of policies designed to support the economy amounting to nearly 20% of GDP. Monetary and fiscal stimulus combined with a strong recovery in discretionary spending should ensure a rebound in activity once the worst of the virus-related disruption is past. The economy is therefore expected to recover from H2 this year. This expectation is further reinforced by the fact that Hungary came out of the COVID-19 crisis completely well thanks to strong macro fundamentals that Hungary had when the crisis reached the country.  

International travel is a key with the gradual reopening of skies, international activities and deals might experience a boom. Clearly occupational performance will be monitored very closely by investors, prior to committing on new deals. We believe the fundamentals of the Hungarian CRE market, with low supply and vacancy across most sectors - underpinned by a strong domestic investor pool - as being in a relatively strong place. Therefore, we expect Budapest will be able to pick up quickly once travel restrictions are fully lifted and decision making allows new investment transactions to move forward. 

22 July

As of 20 July, the containment measures are lifted, but a red-yellow-green colour coding system was introduced in Hungary being effective from 12 July, in response to an increasing number of infections seen in neighbouring countries. Accordingly, the world countries are classified into hazard classes. Countries with the most risk received a red code, moderately risky countries received yellow and less risky countries received green. This coding is based on actual data and can be changed.  

Most office occupiers have returned to the office by now and currently operate under 25-50% office occupancy in order to meet the social distancing measures. Google's mobility report indicates that the mobility to workplace has improved 20% compared to baseline figures in July from the level of minus 50% measured in May and June respectively. 

The latest Research Forum figures show that Q2 demand levels in Budapest were below the trend due to the slower market activity over the crisis period; however, since circa 54% of the new supply is already pre-let, the availability in modern Class A stock is expected to remain unchanged. Class B stock is expected to be affected by less take-up unless properly upgraded. Ongoing development schemes proceed, no delays reported yet.  

8 July 

As of 6 July, the containment measures are lifted in Hungary. Restrictions on retail are already lifted, but everyone entering a shop must wear face protection of some kind. From 25 June, cinemas are reopened as of 2 June. The free parking that was introduced to minimise public transportation traffic is now abolished. 

The Hungarian Government, together with the MNB, has announced a large amount of policies designed to support the economy amounting to nearly 20% of GDP. Monetary and fiscal stimulus combined with a strong recovery in discretionary spending should ensure a rebound in activity once the worst of the virus-related disruption is past. The economy is therefore expected to recover from H2 this year. This expectation is further reinforced by the fact that Hungary came out of the COVID-19 crisis completely well, thanks to strong macro fundamentals that Hungary had when the crisis reached the country.  

International travel is a key with the gradual reopening of skies, international activities and deals might experience a boom. Clearly occupational performance will be monitored very closely by investors, prior to committing on new deals. We believe the fundamentals of the Hungarian CRE market, with low supply and vacancy across most sectors - underpinned by a strong domestic investor pool - as being in a relatively strong place. Therefore, we expect Budapest will be able to pick up quickly once travel restrictions are fully lifted and decision making allows new investment transactions to move forward. 

25 June

As of 22 June, the containment measures have been lifted in Hungary. Restrictions on retail were already lifted, but everyone entering a shop must wear face protection of some kind.  From 18 June, shopping hours for seniors were abolished and from 25 June, cinemas and theatres will fully reopen. Free street parking that has been introduced with the aim of reducing the occupancy in public transport is expected to be abolished on 1 July. 

The Hungarian Government, together with the MNB, has announced a large amount of policies designed to support the economy amounting to nearly 20% of GDP. Monetary and fiscal stimulus combined with a strong recovery in discretionary spending should ensure a rebound in activity once the worst of the virus-related disruption is past. The economy is therefore expected to recover from H2 this year.  

International travel is a key factor in the facilitation of new investment deals and the gradual reopening of the skies should stimulate more international activity. Clearly occupational performance will be monitored very closely by investors, prior to committing on new deals. We believe the fundamentals of the Hungarian CRE market, with low supply and vacancy across most sectors - underpinned by a strong domestic investor pool - as being in a relatively strong place. Therefore, we expect Budapest will be able to pick up quickly once travel restrictions are fully lifted and decision making allows new investment transactions to move forward. 

18 June

As of 15 June, the containment measures have been lifted in Hungary. The country borders have been reopened to and from neighbouring countries like Austria, Slovakia, Croatia and the Czech Republic. The ban on visiting hospitals was lifted on most hospitals, and hotels can restart operation. From 15 June religious ceremonies are allowed, just like weddings and funerals, and must have fewer than 200 guests. Restrictions on public transport is also taking a step in easing the measurements as buses will be fully occupiable. From 16 June, cinemas and theatres are both expected to reopen.   

Restrictions on retail including F&B were gradually eased, first in the countryside and later in Budapest. The current crisis however delivered a drastic but temporary decline in retail sales. According to CSO figures, retail sales in April declined by 10.2% and F&B fell back by c. 70%. May is expected to be significantly improved with consumers returning to physical retail. Google's mobility report now shows that the mobility to retail and recreation returned to baseline figures in early June.  

The volume of online retail accounted for 12.5% of the total retail sales in April, which is an all-time record high figure. Structural changes therefore have been accelerated by the current crisis and there is likely a permanent shift in demand for online retail. Changes however will take more time to filter through in Hungary as the share of online sales was only 7.3% in 2019 as opposed to Western European markets having a share of 18-20%.  

11 June

As of 8 June, the containment measures were lifted in Hungary. The country borders have been reopened to and from neighbouring countries like Austria, Slovakia and the Czech Republic. Universities can reopen but student accommodation facilities are still closed. Senior homes, nurseries, kindergartens and schools have gradually reopened country wide.  

Restrictions on retail including F&B were gradually eased, first in the countryside and later in Budapest. Cinemas are still closed, some that had the equipment have eased the situation by opening drive-in cinemas. From 16 June, cinemas and theatres may be able to reopen. The footfall in shopping centre schemes is recovering with a rebound in retail spending expected to follow from this month. Still, many retailers are struggling with debt loads accumulated during the lockdown period. As a result, many retail units have been closed down permanently, which might attract new operators and indicate changes in the tenant mix, even in prime retail schemes.  

All automotive production and OEM production resumed from late April, suggesting the Hungarian economy will begin to recover from Q3, although production is still operating under limited capacity due to global supply chain disruptions. BMW has recently taken over the land of the planned car manufacturing factory in Debrecen. Reliance on global materials and parts sourcing has become problematic during the pandemic for manufacturers all over Europe. The expectation is that over the mid-term, manufacturers will revert to holding more inventory and move away from ‘just-in-time’ inventory management. Consequently, more warehouse demand especially near automotive hotspots is anticipated in the mid-term of which Hungary, as a hub for German car production in Europe including Audi, Mercedes and the planned BMW, should benefit. 

3 June

As of 1 June, the containment measures have been lifted in Hungary. Restrictions on retail were gradually eased, first in the countryside, as of 4 May, and later in Budapest from 18 May.  Most retailers including F&B have now reopened. The footfall in shopping centre schemes is recovering with a rebound in retail spending is expected to follow from June.  

Hungary's economy is ranked one of the most resilient to the impacts of Coronavirus epidemic, with a contraction of 5.0% expected for 2020. A strong recovery is expected with a projected GDP growth of 4.4% in 2021 and 5.2% in 2022, according to Oxford Economics. 

The country borders have been gradually reopened from 25 May. The virtual standstill of automotive factories however contributed to a decline in industrial production. According to CSO figures, industrial production volume decreased by 5.6% y-o-y in March. All automotive production and OEM have restarted production from late April suggesting the economy began to recover from Q3, although production still works under limited capacity due to global supply chain disruptions.

The Budapest office market has entered the current crisis with solid fundamentals. Vacancy levels are stabilised at around 5% which is one of the lowest among the CEE capitals. Demand continued to grow y-o-y since 2009 and has not reduced for two consecutive years. Hungary has been a key beneficiary of the offshoring of BPO’s and shared service centres following the Global Financial Crisis, and whilst many other global offshoring destinations have struggled with the infrastructure requirements, Budapest has adapted well to the switch to home office necessitated by the current crisis. This should increase Budapest’s attractiveness further as a global offshoring location.   

28 May

As of 25 May, the lockdown in Hungary has eased throughout the country with social distancing measures remaining in effect. A gradual reopening of the country borders has been announced as follows: the southern borders will be reopened with Serbia from 25 May and with Croatia from 29 May. The western borders are planned to reopen with Slovenia from 1 June and with Austria from 15 June.   

Most office occupiers are now making extensive plans to facilitate a return to the office, and some are even trying these plans out in practice. Universities can reopen but student accommodation facilities are closed. Nurseries, kindergartens and schools will gradually reopen from next week, and hotels outside the capital can reopen from this week. 

Restrictions on retail are lifted, but everyone entering a shop must wear face protection of some kind. Shopping hours for seniors remains in effect for grocery stores and drugstores. F&B may be open if they have a garden or terrace where customers may consume food or drink. Most retailers are gradually reopening, and a rebound in retail spending is expected from June. 

The economy contracted by 0.4% q-o-q in Q1 according to latest estimates, the first decline in activity in four years. The closure of automotive factories contributed to a strong decline in industrial production in March and April. However, all car manufacturers have gradually restarted production, which suggests the economy will begin to recover in Q3. The outlook for the economy is well balanced, as the lockdown period was only about seven weeks, but Hungary has a central role in international supply chains and so depends on the pace of the recovery in the wider global economy. Oxford Economics forecast Hungary’s GDP will fall 5.0% this year, before recovering to grow by 4.4% in 2021 and 5.2% in 2022. 

21 May

As of Monday, 18 May, the curfew restrictions were lifted in the countryside on 4 May and in Budapest on 18 May. Social distancing measures and shopping hours for seniors are still in effect. Everyone entering a shop or using public transport must wear face protection of some kind. Public parks and outdoor playgrounds can be visited, outdoor swimming pools and museums can reopen to visitors. 

All retail stores were allowed to open from 18 May including F&B, with the restriction that outdoor areas and terraces can only be opened to guests. Public spaces can be used by restaurants as terraces free of charge in the period 18 May - 1 September. Most retailers are gradually reopening their premises and others are actively planning to do so under strict safety and health measures. Food retailers may have to calculate the safe maximum number of customers in the store at the same time.  

Most office occupiers are now making extensive plans to facilitate a return to the office, and some are even trying these plans out in practice. Universities can reopen but student accommodation facilities are still closed. No exact dates have been announced yet as to the schools reopening.  

With the reopening of the Opel factory in Szentgotthárd from 11 May, all automotive production and OEM have gradually been restarting. BMW, however, has announced a one-year delay in opening their new plant in Debrecen than originally planned, whilst groundwork and hiring for the new scheme had already begun.  

14 May

As of 11 May, a gradual opening of certain retail started and will be followed by the opening of restaurants and bars in Hungary. Curfew measures and shop restrictions, however, remain in place in Budapest and in Pest County.  

Most office occupiers continue to operate through home working despite there being no regulatory restrictions on the workforce coming to the office. Companies are now making extensive plans to facilitate a return to the office. No dates have been announced as to schools reopening.  

Specific retail profiles are gradually reopening their premises (e.g. IKEA, Decathlon), and others are actively planning to do under strict safety and health measures. Everyone entering a shop or using public transport must wear face protection of some kind. Social distancing measures and shopping hours for seniors are still in effect. Food stores may have to calculate the safe maximum number of customers in the store at the same time.  

Whilst border closing still limits ‘just in time’ in manufacturing, most automotive production and OEM are gradually restarting. Returning to work is being planned in a potentially rearranged labour market. BMW, however, has announced a one-year delay in opening their new plant in Debrecen than originally planned, whilst groundwork and hiring of the new scheme had already begun.  

The Hungarian Government, together with the MNB, has announced a large amount of policies designed to support the economy amounting to HUF9.2tr, nearly 20% of GDP. Most of the measures are focused on loan moratorium, tax deferment and liquidity provision, which will accumulate liabilities occurring this year and will have to repaid in 2021. Direct additional fiscal stimulus remains very limited. 

7 May

As of 4 May, a new phase of protective measures is in effect in Hungary. Starting this week, a gradual opening of all retail may start. Hotels, restaurants and coffee shops may follow later this month. Nevertheless, everyone entering a shop or using public transport must wear face protection of some kind. Food stores may have to calculate the safe maximum number of customers in the store at the same time. Stricter health protocols regulating restaurants and other businesses will probably be in effect for the whole year.  

Curfew measures and shop restrictions will remain in place in Budapest and in Pest County. Social distancing measures and shopping hours for seniors are still in effect. As of 1 May, a new progressive tax element will be introduced in Hungary, primarily affecting large FMCG retailers.  

The Hungarian Government, together with the MNB, has announced a large amount of policies designed to support the economy amounting to HUF9.2tr, nearly 20% of GDP. Most of the measures are focused on loan moratorium, tax deferment and liquidity provision, which will accumulate liabilities occurring this year will have to repaid in 2021. Direct additional fiscal stimulus remains very limited. 

30 April

As of 27 April, Hungary is still under lockdown. Curfew restrictions introduced on 27 March have been extended for an indefinite period to be reviewed on a weekly basis. Prime Minister Viktor Orbán has announced that some of the restrictions might be eased from mid-May taking into consideration nearby countries such as Austria and Italy who are dialling back restrictions on social and economic life. The automotive production and OEM have been gradually restarting with Audi, Opel and Suzuki all reopened. Production at the Daimler plant in Kecskemét will gradually resume from 28 April. 

Social distancing measures and shopping hours for seniors are still in effect. People are only allowed out to shop for groceries, do basic errands or obtain medical supplies. As of 27 April, people must wear face masks on public transport and in stores. Most retail stores are closed due to dramatic decline in footfall, but shopping centres are open and operate under tightened opening hours. As of 1 May, a new progressive tax element will be introduced in Hungary, primarily affecting large FMCG retailers.  

The Hungarian Government has announced a Financial Aid Package, which offered a blanket moratorium on loan repayments until the end of the year and, imposed measures to payroll tax cuts for the most heavily affected sectors. The package is fiscally supported by the Central Bank providing loans to commercial banks at a fixed interest rate of 0.9%. The MFB Group (Hungarian Development Bank) announced loan programs in a total of HUF 1,490 billion for the micro, small and medium-sized enterprise and large enterprise segments.

23 April

As of 20 April, Hungary is still under lockdown. Curfew restrictions introduced on 27 March have been extended indefinitely to be reviewed on a weekly basis. Whilst the current Government measures imposed no restrictions on the workforce coming to the office, most companies made an immediate transition to home office where their infrastructure was easily transportable.  

The borders are still closed from passenger traffic which limits ‘just in time’. Yet, automotive production and OEM have been gradually restarting with Audi being the first. More manufacturers’ restart is expected soon which includes Mercedes, Opel and Suzuki too.  

Social distancing measures and shopping hours for seniors are still in effect. People are only allowed out to shop for groceries, do basic errands or obtain medical supplies, and exercise in the open. Most retail stores are closed due to dramatic decline in footfall, but shopping centres are open but operate under tightened opening hours. As of 1 May, a new progressive tax element will be introduced in Hungary, primarily affecting large FMCG retailers.  

The Hungarian Government has announced a Financial Aid Package, which offers a blanket moratorium on loan repayments until the end of the year and, has imposed measures to payroll tax cuts for the most heavily affected sectors. 70% of wages will be paid by the Government for 3 months for part-time workers. The package is fiscally supported by the Central Bank providing loans to commercial banks at a fixed interest rate of 0.9%.  

16 April

As of 14 April, Hungary is still under lockdown. Whilst the current Government measures imposed no restrictions on a workforce coming to the office, most companies made an immediate transition to home office if their infrastructure was easily transportable.   

As of 16 March, the borders are closed from passenger traffic which limits ‘just in time’. Therefore, the key production industries such as automotive and related component supplier manufacturing have ground to a virtual standstill. Audi however, partially restarted production under strict safety measures from 14 April.  

Social distancing measures and shopping hours for seniors are still in effect. People are only allowed out to shop for groceries, do basic errands or obtain medical supplies, and exercise in the open. Whilst the Government still has not enforced non-essential shop closure, as a result of a dramatic decline in sales, many retailers have opted for voluntary shut down over the weeks. Most shopping centres are open but operate under tightened opening hours.

The Hungarian Government has announced a Financial Aid Package, which offered a blanket moratorium on loan repayments until the end of the year and, imposed measures to payroll tax cuts for the most heavily affected sectors. 70% of wages will be taken over by the Government for three months for part-time workers, and engineers and workers in the R&D sector will receive a 40% wage supplement. The Central Bank has increased the potential available liquidity of the banking system by HUF 2,600 billion and a moratorium has been introduced in the Growth Credit Programme. The base rate is left unchanged at 0.9%.  

9 April

Hungary is under lockdown. Whilst the current Government measures imposed no restrictions on a workforce coming to the office, most companies made an immediate transition to home office if their infrastructure was easily transportable. As of 16 March, the borders are closed from passenger traffic which limits ‘just in time’. The key production industries such as automotive and related component supplier manufacturing have ground to a virtual standstill.  

Social distancing measures and shopping hours for seniors are still in effect. People are only allowed out to shop for groceries, do basic errands or obtain medical supplies, and exercise in the open.  

Whilst the Government still has not enforced non-essential shop closure, as a result of a dramatic decline in sales, many retailers have opted for voluntary shut down in the last two weeks. Most shopping centres are open but operate under tightened opening hours.  

The Hungarian Government has already announced a Financial Aid Package, which offered a blanket moratorium on loan repayments until the end of the year and, imposed measures to payroll tax cuts for the most heavily affected sectors. A further larger scale rescue package is expected to be announced on 7 April.  

2 April

Hungary has been in lockdown since 28 March. Car manufacturers including Audi, BMW, Mercedes and Suzuki have temporarily closed production. Most office occupiers have shifted to home office. 

Social distancing measures are in place and shopping hours for seniors was introduced. By decree, leisure and entertainment venues have all closed and people are only allowed out to shop for groceries, do basic errands or obtain medical supplies, and exercise in the open. 

Whilst the Government has not enforced non-essential shop closure, as a result of a dramatic decline in sales, many retailers have opted for voluntary shut down in recent days. Most shopping centres are open but operate under tightened opening hours. 

The Hungarian Government has announced a Financial Aid Package, and more is expected to follow this week. It includes: 

A blanket moratorium on loan repayments for all companies and private borrowers until the end of the year. 

Measures to defend jobs, including payroll tax cuts for the most heavily affected sectors, such as tourism and entertainment among others.  

In the meantime, the National Bank of Hungary has left the base rate unchanged and will increase the available liquidity of the banking system by HUF 2,600 billion.