Key events in EMEA next week

The moment of truth is approaching as the Hungarian Central Statistical Office gets set to release economic activity data for March. This is the first opportunity to see hard data for a full month affected by the Ukraine war. We see the most significant impact being visible in industrial production as several car makers downscaled production due to shortages of spare parts. But despite the monthly drop in March, the quarterly performance should remain sound enough to support strong GDP growth. Retail sales probably had another strong month as one-off transfers to households in February probably had a positive impact on March's retail turnover as well. However, we wouldn’t rule out a downside surprise as the government tried to cut “fuel tourism” in March with measures to secure local fuel supplies given that Hungary has the cheapest retail fuel prices in the central and eastern European region due to price caps.

In April, we expect annual inflation to maintain its upward trend, reaching 66.0% (4.6% on monthly basis) from 61.1% a month ago. This is due to deteriorating expectations and pricing behaviour in addition to continuing pressure on import prices and food prices, along with further administrative price adjustments in certain products.