AGP Executive Report

Auto & EV Market: BYD kept accelerating in Hungary, becoming the top new-energy brand in H1 2026 with 2,126 passenger cars sold (+143.8% y/y), leading both the NEV segment and the BEV segment (1,302 BEVs, 17.37% share). Energy & Renewables: Green Energy Investhor secured its first final construction permit for a 28.8 MW wind farm near Bana, with a wider 550 MW development pipeline across 16 municipalities. Housing: Hungary’s housing price momentum cooled in Q2: listing prices rose just 0.3% q/q and annual growth slowed to 14%, with demand dampened by election caution and fading Home Start support. Aviation & Sanctions: OFAC extended NIS’s operating license until July 31, while MOL got more time to keep negotiating the purchase of the Russian stake. Public Safety & Health: A salmonella outbreak linked to flavoured noodles has reached 14 European countries, with Hungary among the affected. Travel Disruption: Wizz Air says it’s investigating a case where up to 23 passengers were left behind in Greece after a crew duty-hours issue. Climate & Infrastructure: Extreme heat continues to strain systems, with reports of power outages and water restrictions in parts of Hungary and the region.

Hungary’s Heatwave Aftermath: Record temperatures eased as thunderstorms and heavy rain swept the country, but the extreme weather left scars—heat-related emergencies rose, rail speed limits were imposed, and water demand disrupted supplies in some areas. Transport Resilience: FLIRT trains restarted after heat-triggered safety shutdowns, underlining how hotter summers are stressing Hungary’s rail systems and pushing for better vehicle design. New Air Links: Budapest launched direct flights to Riyadh with flynas, adding another intercontinental route that could boost tourism, trade and investment between Central Europe and the Middle East. Public Spending Scrutiny: A government audit claims taxpayers paid over HUF 2bn for Peter Szijjártó’s private jet charters in 2025, reigniting debate over costs and accountability. EU Energy Funding: The European Commission and EIB approved €2.5bn for 51 energy projects, with Hungary among the top recipients for grid digitalisation and efficiency upgrades. Local Infrastructure Green Push: BKK secured EU and domestic funding for major Danube-side promenade upgrades on the Pest embankment, aiming to expand pedestrian and cycling space and add greenery. Food Safety Alert: A multi-country salmonella outbreak linked to flavoured instant noodles has reached Hungary, with dozens hospitalised across Europe. Business & Markets: Hungary’s trade surplus hit EUR 502m in May, while BYD’s June sales growth was driven mainly by exports—another reminder of how global demand is reshaping competition. Tech & Regulation: Hungary’s crypto rules may be relaxed, as the government moves toward a new regulatory era for digital assets.

Hungary’s housing market: Duna House says buyers under 40 are driving demand, with 30–40-year-olds the most active and biggest spenders, especially in the Budapest agglomeration, while new-build interest stays softer and many families still prefer ready-to-move second-hand homes. Automotive pressure: Allianz Trade warns Hungary’s export-heavy auto sector is vulnerable to global shocks as profitability erodes; insolvency risk is already visible and the sector faces cost and EV-transition uncertainty. Budget credibility: Hungary’s finance minister says the 2027 budget process will be more transparent and timely, criticizing past “rush and errors” and arguing investor confidence suffered. EU migration enforcement: The European Commission’s Channel Action Plan pushes a “whole-of-route” approach to irregular migration, treating it as a security and organized-crime challenge, not just a border issue. Energy & climate stress: Record heat and drought are worsening Hungary’s water crisis, with Lake Velence hitting extreme low levels and agriculture taking a hit. Cross-border business moves: TeraPlast completes its Spain polyethylene pipe plant acquisition and plans modernization; OTP Bank launches a large EMTN programme on the Hong Kong Stock Exchange. Regional politics: Slovakia starts the V4 presidency with a focus on EU competitiveness, international law and practical cooperation.

EU Trade & Customs: From July 1, the EU starts charging a temporary €3 duty on low-value e-commerce parcels (up to €150), ending the long-standing exemption and aiming to curb unfair competition and improve customs control. Payments & Finance: Pay10 EU Kft received an Electronic Money Institution license from Hungary’s central bank, paving the way for a broader Pay10 digital wallet and SME payment services launch in Hungary. Energy & Grid Resilience: E.ON Hungaria reports 2–3x more grid outages in Budapest and parts of northern Transdanubia due to extreme heat, with extra readiness measures and rescheduled works. Public Services Under Strain: Hungary introduced water restrictions in 120 settlements as heat records fell; officials urged residents to use tap water only for essential purposes. Local Business Climate: Budapest’s outdoor advertising rules may push ad budgets away from local media toward international digital platforms, risking revenue and tax losses. Tourism & Infrastructure: Széchenyi Baths renovation is set to begin end-August after procurement, with the first phase focused on the women’s thermal section. Education & Talent: QS World University Rankings 2027 show mixed results for Hungary: ELTE tops nationally but slipped internationally. Workplace Safety: Police investigations follow two fatal incidents at BYD’s Szeged plant construction site, raising safety concerns.

Hungary’s public control shift: The government has started dismantling Orbán-era public-interest asset management foundations (KEKVA), moving universities and other institutions back under state control as part of a push to unlock frozen EU funds. Heatwave disruption: Tui cancelled a Budapest river cruise after an air-conditioning fault on the Skyla; passengers were moved to hotels and flown home, with refunds and vouchers. Energy & flexibility: A mid-year EU power-sector review says record clean generation cushioned Europe from a gas-price shock, but highlights a growing need for storage and grid flexibility as solar output varies. Healthcare court fight: Doktor24 filed objections in Hungarian courts against a liquidation order, arguing the process was irregular despite claiming it remains profitable. AI for culture: MOME is developing an image/video AI platform aimed at more accurate representation of Hungarian and other low-resource languages using museum and archive data. Telecom leadership: Magenta Telekom named Nemanja Žilović as Chief Commercial Officer for B2C from Aug. 1. Regional business: TATUUM opened its first Baltic store in Lithuania, extending its Central and Eastern Europe retail push. Serbia sanctions update: The US extended NIS’s temporary licence to July 31, keeping talks on the Gazprom stake sale to MOL on track.

Energy & Grid Resilience: MVM handed over a 57 MWh battery storage system at its Ajka gas turbine plant (10.4bn forints, incl. 3.8bn EU funding), aiming to boost flexibility during heat-driven peak demand. Heatwave Impacts: Record temperatures and drought are again stressing Hungary’s water and power systems, with parts of the Great Plain facing long-term soil dryness and local tap-water outages reported near Budapest. Water Security: In Szada, rising demand overwhelmed the ageing network, leaving most residents without tap water for nearly two days and pushing people to water carts. EU Policy Clash: Hungary opposes the EU Commission’s plan to restrict entry for military-age Ukrainian men, while saying it will still accept ethnic Hungarians fleeing Ukraine. Corporate Restructuring: himolla filed for a court-supervised “protective shield” restructuring in Germany, citing subdued demand and price pressure; its Hungarian sites are said to be unaffected directly. Finance & Markets: OTP launched a €7bn EMTN programme on the Hong Kong Stock Exchange, signaling continued investor outreach beyond Europe. Culture & Creative Economy: Hungarian animation scored at Annecy, with two works winning awards.

Hungarian Real Estate Costs: Eurostat shows Hungary’s residential construction prices jumped 155.4% from 2015 to 2025, the second-biggest rise in the EU after Bulgaria—another sign of mounting pressure on homebuilding and renovation budgets. Budapest Mobility & Retail Costs: From 1 July, Budapest parking becomes mobile-only (apps, SMS or calls) and hourly rates rise across zones; at the same time, new EU customs rules in Hungary add a EUR 3 customs administration fee for low-value non-EU online purchases (below EUR 150), charged per product category. Banking & Capital Markets: OTP is set to strengthen its international funding reach by directly listing a debt financing programme on the Hong Kong stock exchange, reflecting European banks’ growing interest in Asian capital. Crypto Regulation Shift: MiCA takes effect from 1 July, forcing crypto platforms to obtain authorization; major exchanges are pushing promotions to win users migrating from non-compliant services. Heatwave Impact: Hungary remains under the highest heat alert, with government urging home office where possible and more water access—while Europe’s extreme temperatures keep straining health and power systems. Education & Culture: REAL School Budapest enters the World’s Best School Prizes Top 10 in the Environmental Action category; Budapest Pride drew thousands despite the heat, with city support and water stations along the route.

Aviation & Tourism: London Southend Airport hit a milestone with 30 routes as easyJet adds Lyon (from Dec 3, 2026) and Sharm el-Sheikh (from Jan 4, 2027), extending both winter city-break and sun options. Energy & Infrastructure: Hungary is bracing for peak demand during the heatwave: MVM inaugurated a 31MW/62MWh battery storage system in Tiszaújváros (about HUF 10bn, EU + RRF support), while the economy minister urged households to cut electricity use between 6pm-9pm to protect the grid. Weather & Public Services: Extreme heat kept breaking records in Budapest and nationwide, with authorities distributing drinking water and setting up cooling points; the government also mandated home office for public sector employees. Finance & Industry: Richter Gedeon announced collective redundancies (30+ jobs) tied to competitiveness pressures, with the strengthening forint cited as a key driver. Transport Projects: Secrecy has been lifted on Budapest–Belgrade railway documents, clearing the way for passenger services once signalling tests meet Hungarian and EU safety standards. Banking Expansion: OTP Bank expressed interest in opening a branch in Mongolia, aiming to bring more competition and financing access to a market with no foreign commercial bank branches yet. Markets & Trade: Hungary’s tourism showed mixed signals in May: arrivals rose 2.6% year-on-year to nearly 1.8m, but nights edged down 0.5%.

Heatwave and economy: Europe’s record-breaking heat is now hitting central and eastern parts hardest, with forecasts up to 38C in Hungary and neighbouring countries and WHO warning of over 1,300 excess deaths since 21 June; the strain is also showing up in infrastructure and services, including major rail disruptions where AC systems can’t cope with 40C conditions. Tourism and regulation: Budapest’s Airbnb crackdown is reshaping demand: Terézváros (District VI) saw a sharp drop in available bed places and arrivals after the private-accommodation ban, while other districts absorbed some of the spillover; overall May tourism was mixed, with arrivals up but tourism nights slightly down. Euro adoption watch: The ECB says Romania has made only limited progress toward the euro, citing high inflation, fiscal gaps and remaining legal incompatibilities; for Hungary, long-term interest rates are still above the reference value and governance quality remains a key sticking point. Energy and industry: Hungary’s homebuilding costs are rising and the country is also moving on batteries and grid investment, including new battery storage capacity and broader electricity network developments. SMR and markets: Rolls-Royce’s push into small modular reactors keeps drawing investor attention, with potential spillovers for European energy and industrial strategy.

Budapest Airport Upgrade Watch: New procurement steps point to major access changes at Liszt Ferenc International Airport, including a new road network, a flyover, more parking and utility reconstruction—potentially reshaping how people and freight reach Hungary’s main hub. Heatwave Fallout in Hungary and Europe: A record-breaking European heatwave is driving rising death tolls and service strain, with WHO reporting over 1,300 excess deaths since 21 June and forecasts showing extreme heat hitting Germany, the Czech Republic, Hungary and Poland. Household Cost Pressure from Climate Stress: A study links heat plus drought to nearly 3% lower average household incomes in Europe, with central Hungary among the hardest-hit regions. US Surveillance Policy Shift: The US ATF canceled a contract for warrantless mobile device tracking after lawmakers and legal authorities raised concerns—an issue that also touches Hungary’s wider intelligence and data debate. Hungary’s Euro Roadmap Signal: Support for euro adoption is reported as exceptionally high, while Hungary is set to submit medium-term budget plans and a euro adoption roadmap. Transport & Tourism: The Zugliget Chairlift (Libegő) in Budapest is moving toward technical modernization, keeping the city’s iconic Buda Hills ride in focus.

Heatwave Fallout: A deadly European heatwave is moving east, with France reporting around 1,000 additional deaths since Wednesday and hospitals seeing sharp spikes in emergency visits as temperatures break records across Germany, the Czech Republic and beyond. Budapest Pride & Rights: Budapest Pride closed with renewed calls for legal equality after the march drew thousands despite extreme heat, following the lifting of last year’s ban after Orbán’s defeat. Rail Transparency: Hungary’s government has started declassifying documents tied to the Budapest–Belgrade railway, with freight already running and passenger service dependent on signalling tests meeting Hungarian and EU safety standards. Euro Adoption Push: Prime Minister Péter Magyar says support for joining the euro zone is exceptionally high (about 70–75%) and Hungary aims to meet Maastricht criteria by around 2030. Energy & Industry: MVM is moving ahead with a 31MW/62MWh battery storage investment, while Hungary’s central bank has cut its base rate to 6%, keeping the focus on inflation and growth. Logistics Expansion: Rohlig SUUS Logistics is accelerating CEECA expansion with a roughly €30m investment programme backed by Poland’s development funds, including support for projects across the region.

Euro Adoption Push: Prime Minister Péter Magyar says support for joining the euro zone is exceptionally high in Hungary (about 70–75%) and targets meeting Maastricht criteria by around 2030, despite currently missing all conditions. Energy & Grid Flexibility: MVM Tisza Erőmű inaugurated a 31MW/62MWh battery storage project in Tiszaújváros, backed by HUF 4bn EU grants, as MVM aims to scale storage capacity to 500MW by 2030. Industrial Digitalization Warning: The Industry 4.0 Technology Platform Association says Hungary risks falling behind on industrial competitiveness without faster company-level digitalization, especially among SMEs. Small Business Fuel Hit: The Association of Independent Petrol Stations (FBSZ) demands compensation for losses from the fuel price cap, arguing family-run stations faced no retail-wholesale margin while still paying taxes. Customs Costs for Online Shopping: From 1 July, EU customs changes will make low-value imports via Temu/Shein/AliExpress pricier in Hungary, adding a EUR 3 charge per product category for consignments under EUR 150. Retail Ownership Deal: Indotek Group bought the remaining 53% stake in Auchan Hungary, completing full Hungarian ownership while keeping the Auchan brand and supply ties. Local Economy & Infrastructure: Rohlig SUUS Logistics announced a ~€30m CEECA expansion programme with Poland’s development institutions, including a €10m contribution from the Foreign Expansion Fund 2. Public Life & Rights Poll: A Medián poll finds 69% of Hungarians support allowing demonstrations and marches for LGBT rights, with higher backing in Budapest. Safety & Investigation: A hospital worker in Budapest was arrested after police allegedly found human body parts at his workplace and home, with an expanded forensic investigation underway.

Euro Roadmap: Prime Minister Péter Magyar says support for euro adoption is at 75% and targets meeting Maastricht criteria by around 2030, arguing euro entry would boost stability and development. Fuel Market Policy: Hungary’s temporary fuel price cap ends today as the government lifts the emergency measure, citing calmer global energy markets and noting the cap had been introduced in March amid oil price spikes. Inflation & Housing: The National Bank of Hungary forecasts inflation staying below target through 2026 and 2027, while also pointing to a potential 30% rise in new home completions this year, helped by the Home Start scheme. Budapest Short-Term Rentals: District VIII adopted a base concept for tighter Airbnb-type rules, with district and area caps plus building-level limits and resident consent requirements for new rentals. Industrial & State Control: ZalaZONE’s automotive test track is set to be renationalised from July, with a review of its management and use of public funds. Higher Education Probe: Police raided Semmelweis University’s internal medicine and haematology department tied to a clinical trial investigation; the university says it is cooperating. Retail Ownership: Indotek Group buys the remaining 53% of Auchan Hungary, making it fully Hungarian-owned while keeping the Auchan brand and network ties.

Euro Roadmap & Fiscal Policy: Hungary’s PM Magyar says the country could meet euro adoption criteria by 2030, while Finance Minister Kármán says a revised medium-term fiscal framework will be submitted later this year to map the path toward eurozone entry and unlock EU funds. EU Enlargement Mechanics: The European Commission is preparing “gradual integration” benefits for candidate countries—more funding access and partial single-market entry without voting rights—aimed at keeping Ukraine and Moldova engaged while accession talks continue. Energy Transition (Geothermal): Central Europe is leaning into geothermal for more secure, weather-independent heating and power; Hungary’s Szeged is highlighted as a near-full district-heating overhaul using geothermal heat. Banking & Investment Climate: An EIB survey finds CESEE banking sectors—incl. Hungary—remain highly profitable with robust credit demand, and most cross-border banks plan to expand. Sanctions & Energy Deals (Serbia): Serbia’s NIS has asked the US OFAC for a new licence to keep operating beyond July 1 as talks continue over Gazprom’s stake, with MOL also holding a temporary OFAC licence. Travel & Business Connectivity: easyJet is adding new routes from the UK to Nuremberg, while Budapest 2027 World Aquatics branding was unveiled with a one-year countdown.

Heat & Safety: Hungary has issued a nationwide outdoor fire ban from June 25 due to prolonged dry weather and wildfire risk, prohibiting lighting fires in forests, wooded areas and within 200 metres of them, while gas-powered and enclosed cooking/heating devices are allowed. Public Health: A third-degree heat alert is in force from Saturday midnight, with officials warning of extreme temperatures for at least four days and urging residents to avoid alcohol/caffeine, stay indoors between 11am-4pm, and never leave children or pets in parked cars. Legal/Politics: PM Péter Magyar demanded the Chief Prosecutor immediately remove “Hungarian Cosa Nostra” figures tied to the “gold convoy” case, after claims that Viktor Orbán and former TEK head János Hajdu were named as suspects in leaked documents. State Oversight: ZalaZONE’s automotive test track is set to return to state ownership by July, with the ministry to review finances and operations after concerns over public-fund use. Business & Consumer: Lidl in the UK issued an urgent recall of Ferrero Frozen Nutella Croissants due to possible metal fragments, with the recall also reported across several EU countries including Hungary. EU Enlargement: The European Commission has effectively separated Ukraine and Moldova’s accession paths, moving to a more merit-based, country-by-country pace. Tech & Industry: Hungarian-built systems are already supporting the JUICE mission to Jupiter, with HUN-REN teams designing power supply for key instrument detectors. Emergency Services: Hungary’s National Ambulance Service received a new mass-casualty response vehicle to move equipment and staff to hard-to-reach emergency scenes.

Hungary’s Labour Market: KSH data show employment at 4.654 million in May and unemployment at 4.3% (209,000 jobless), with job search averaging 13.3 months. Rail Reform: The government plans fully state-owned national transport and rolling stock management companies, funded via RRF loan transfers, to renew HEV H5/H6/H7 fleets and parts of the InterCity fleet while gradually introducing competition in cost-effective operations. EU Enlargement Roadblock: Brussels will open only two additional accession negotiation clusters for Ukraine and Moldova before the summer break, after Hungary’s renewed opposition stalled the earlier five-cluster plan. Construction & Labour Safety: A second worker has died at BYD’s Szeged plant amid ongoing labor scrutiny; authorities also issued occupational security fines and warnings to contractors. Bank Lending Outlook: An EIB survey finds strong credit demand across CESEE, including Hungary, while loan supply readiness—especially for large firms—shows slight weakening. Tourism Pressure in Budapest: Airbnb-style short-term rental bans in the 6th district are linked to a reported ~30% revenue drop in H1, raising fears of bankruptcies. Aviation Connectivity: easyJet adds winter direct flights to Budapest from Belfast and Liverpool, starting November 2026. Defence Deliveries: Saab delivered two more Gripen C fighters to Hungary, completing the latest contract amendment. Health & Innovation: EU-funded phage-therapy research (with Hungary among trial sites) targets recurrent urinary tract infections amid rising antibiotic resistance.