Page 45 - CE Outlook Regions 2024

Istvan Tibocz, has built up an impressive extensive luxury hotel network, while Orban’s childhood friend, Lorinc Meszaros, operates the country’s leading hotel chain, Hunguest Hotels.
Real wage growth and the economic rebound in 2024 could lift domestic tourism, while the relatively weak forint should help Budapest maintain its competitive advantage in the region. The local tourism agency’s strategy for 2023-2030 aims to make Hungary the leading destination in Central Europe, drawing 20mn and boosting guest nights to 50mn. The contribution of the sector to GDP could rise to 16% by 2030 from 9% in 2022.
3.4 Real economy - Slovakia
3.4.1 Retail
The country’s retail turnover registered nine consecutive months of decline in 2023, with the latest figures (-0.2% y/y in October) signalling a much-awaited easing in this stretch.
The easing was particularly impacted by the increase of 1.2% y/y in the turnover at large grocery stores, elevating expectations that pressured households are regaining some of their purchasing power. This should further be contributed to by the easing of the fall of real wages. These dropped by 0.6 y/y in the Q3, which was the lowest depreciation in the last seven quarters, accompanied by easing inflation (6.2% y/y in November).
3.4.2 Banks
In December the Slovak cabinet approved an additional levy on the banking sector, which was described as “remaining resilient” in the National Bank of Slovakia (NBS) report from November. The NBS report also stated that banks’ profitability increased by more than 50% y/y, mainly on the back of income from interest rates in the corporate sector.
The NBS does not expect significant growth anymore and stable income is projected to come from interest rates on mortgages. The risk of household defaults should diminish next year, although the NBS identified a small group of households exposed to a higher level of debt risk.
The new 30% super tax on banks profits should be effective as of January, if the opposition obstructions aimed at preventing cabinet’s dismantling of the Special Prosecutor Office and changes in the criminal code do not delay the implementation.
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