Question:

Can you clarify who said this, "Inflation was a priority public enemy, which required economic policies to be supportive of the forint, adding that the downside impact from the stronger forint on the exports competitiveness was limited and acceptable." Nagy or Varga?

The question was asked in relation to the following story: Stable forint, permanent reduction of inflation are NBH primary goals - Varga

Answer:

It was Nagy, apologies for any confusion. He said it in an interview for Reuters a couple of days ago, which you can read here.

Question:

What is the most credible poll in Hungary, please? Last week you sent an email about Fidesz leading polls in August. It is a bit confusing.

The question was asked in relation to the following story: Opposition leader Peter Magyar is most popular politician in August - poll

Answer:

It would be difficult to name a single pollster as the most credible, in fact we would struggle to say that any pollster is credible. There are two to three pollsters, which are unquestionably linked to the government, while the remaining pollster are rather affiliated to the opposition in one way or another. As a rule, the pro-government pollsters produce poll results, which favour the ruling Fidesz party. Nezopont is the most widely known pro-government pollster and its poll last week continued to show an advantage for Fidesz, contrary to most other polls, as you said. We will be the first to warn that Nezopont can be considered biased in favour of Fidesz, but it is also worth bearing in mind that Nezopont had one of the best predictions of the 2022 election result.

We still believe that Tisza Party should be ahead of Fidesz in terms of popularity, given the wide consensus findings among the other pollsters. Out of them, we probably tend to favour the Zavecz Research Institute (ZRI) the most, since it is a well-established pollster and its head Tibor Zavecz is a distinguished, experienced professional in the field. ZRI used to be a more active pollster with monthly surveys, but it has gradually reduced their frequency lately. ZRI, however, did not perform well in predicting the actual results of the two latest elections, we note.

Our conclusion would be that all poll results should be treated with caution and looking at poll averages, rather than trusting a single pollster, would be probably advisable.

Question:

Does the deficit-free projection for 2030 refer to the republican, the state, or the consolidated budget? How are flows between the government and entities like Baiterek, Samruk-Kazyna, and the National Oil Fund regulated?

The question was asked in relation to the following story: Government's macro forecast sees deficit-free budget by 2030

Answer:

The deficit-free projection concerns the state budget. The actual 2026-2035 development concept has not been published yet, but a Telegram post by the government confirms this. With regard to the sovereign fund, it does not rely on budget financing, only receipts from oil exports. It is the source of transfers to the budget, however, which can be guaranteed or targeted.

The guaranteed transfer is regulated by the fiscal rule. In essence, the annual amount cannot exceed the projected oil tax receipts for the year based on a curbing oil price and on the official EnergyMin output projection. Over 2026-2028, the government plans guaranteed budget transfers from the sovereign fund at KZT 2.77tn each year.

The authorities have pledged not to rely on targeted transfers in the respective period. In general, such transfers are approved by the president to support 'strategic national projects'. In Q1 2025, the EconMin announced an agreement with the NBK to cap targeted transfers at 30% of the annual guaranteed transfer.

Baiterek and Samruk-Kazyna work differently despite some similarities. The government is Baiterek's only stakeholder and capitalises the fund. Yet, Baiterek's subsidiaries also use market instruments like bond placements, syndicated loans, and international borrowing agreements to increase financing volumes.
In 2025, the government's capitalisation of Baiterek was approved at KZT 1tn. The holding pays dividends to the state, but they are not subject to a concrete regulation. The FinMin makes a separate decision each year. In general, it tends to raise dividend payments in case of fiscal pressures. Last year's dividend payments to the government equaled KZT 61.2bn or 15% of Baiterek's net revenues.

The government is Samruk-Kazyna's only stakeholder as well, though the latter's funding mostly reflects dividends from its portfolio companies. It also makes use of borrowing mechanisms and gets a share in case any of its assets are privatised. More recently, the government approved use of sovereign fund assets for investment in companies owned by Samruk-Kazyna. This was done to alleviate fiscal pressures as well.

The sovereign holding is obliged to transfer 7% of its annual revenues to a public fund established in 2022. It was advertised by President Tokayev as a means of supporting charity projects in Kazakhstan. For 2024, Samruk-Kazyna's transfer amounted to KZT 74.76bn.

In June 2025, the government eased the dividend requirements affecting the holding. It removed the minimum payment threshold, which was set at KZT 25bn. In addition, Samruk-Kazyna's board is now in charge of determining the holding's 'systemic' assets, which are the ones that determine its dividend payment commitments. As of this year, Samruk-Kazyna has to pay the government 50% of the dividends it receives from its 'systemic' subsidiaries.

Question:

If you were to assign a probability of at least one cut by the end of the year (over the next three meetings), what would it be?

The question was asked in relation to the following story: Glapinski signals MPC may cut in Oct if there's positive power price news

Answer:

I would assign a 100% probability of at least one more cut over the next three meetings. My question is whether there might be room for more, though this ETS2 prospect does cloud things.

My 100% call for at least 25bps in cuts is based on my expectation power prices will not rise in Q4. There are no guarantees in life, or in monetary policy, but if the governments wants the freeze to be extended and the president wants the freeze to be extended, there should be room for this to be passed and signed quickly so the cap is extended through Q4. That would mean CPI inflation will be no higher than 3% y/y or so in Q4. That lower base should mean lower CPI inflation in early 2026 and that would likely encourage the MPC to cut. Thus, as long as this power price legislation is passed -- the Sejm sits on Sep 9-12 and Sep 24-26 in September -- the cut will come.

There might be some question whether the MPC moves as soon as October considering the council's practice of moving every second month, but this cut should happen by the November sitting.

The further path will likely depend on the updated CPI and GDP projections to be approved in November. FinMin Domanski and EnergyMin Milosz have both been talking about power tariffs in 2026 meaning that prices will fall. If they do, this could give even more downside to inflation and perhaps extract one more cut this year, though I imagine the MPC might err on the cautious side and be happy with 125bps in cuts this year.

Next year might be more impacted by the moves regarding the ETS2. The government is trying to delay it or cancel it, but I'm not sure the prospects of this. It was accepted by the previous PiS government and so it is not a question of just not approving it.

Question:

When will we learn the result of the president's bill to freeze electricity prices for Q4?

The question was asked in relation to the following story: Govt readies bill to extend power cap in Q4, pay heating vouchers in 2026

Answer:

The government will not proceed with the president's bill as it will likely not proceed with any presidential bills due to the political fight between the PiS-backed president and the senior ruling Civic Coalition (KO)-led coalition. However, the government is finalizing its own bill to extend the power price freeze in Q4. That bill was published on Fri. and I covered it earlier this week (https://emergingmarketwatch.com/browser#/article/1331053). It extends the price cap as part of a bill that is to pay out so-called heating vouchers, which are cash payments to low-income households to offset the rise in heating prices for some.

Because the president backs the price cap and won't oppose the heating voucher, there must be considered a high chance this gets done and so power prices should not rise in Q4. However, this is part of a political process, and part of the political war, and so there is also the risk of a political problem or brinksmanship gone wrong and so we shall see in the end.

The timeline is short since the current power price cap of PLN 500/MWh expires on Sep 30. I imagine the government will submit the draft legislation to the Sejm very soon and will work very quickly. The Sejm meets on Sep 9-12 and Sep 24-26. I imagine it might even be passed during the first sitting, seeing an expedited process. The next sitting of the Senate is planned for Sep 24-25. Thus, the Sejm will have to pass it quickly, the Senate will pass it without amendment on Sep 24-25 and then it goes to the president.

For the coalition, this is probably acceptable. The president gets 21 says in which to sign legislation, veto it, or send it to the Constitutional Tribunal for a review. He will only have several days to make a decision, but if he doesn't sign, he will know that he might be blamed most for the subsequent rise in power prices.

We should thus know by the Sep 24-26 sessions of the Sejm and the Senate whether the legislation has been passed in time, and then in the next few days whether the president will sign.

Question:

Do you know how much was issued in POLGBs this year, and how much is left to issue in the reminder of the year according to the budget plan? Do you know the same for eurobonds?

The question was asked in relation to the following story: DepFinMin says 2025 financing needs are 89% covered at end-Aug

Answer:

One of the faster ways to find out how much has been issued is to use the FinMin's monthly debt reports (here). On Pg 5, the ministry breaks down its financing so far in the year. That shows the issuance to end-July of PLN 224.1bn of T-bonds, PLN 16.0bn of T-bills, and PLN 13.3bn in switching auction. Of Eurobonds, it has issued PLN 47.7bn worth. The FinMin will publish the September debt report for end-August in the coming days and so all of these numbers will soon be updated. At end-August, DepFinMin Drop said the financing total was lifted to 89% of the original PLN 553.0bn target from 85% at end-July, meaning extra financing of some PLN 22bn. Most of this should have come via the T-bond auction and switching auction results it released.

It is, however, unclear how much is left to be issued. In the 2026 budget details, the FinMin cut the gross financing target for 2025 to PLN 488.6bn. An 89% coverage ratio for total financing this year would mean total financing of PLN 492bn. That would mean the new revised-down financing target for this year is covered and mean no further issuance would be required.

In the 2026, budget details, the FinMin also released expected financing execution in 2025. It gave a T-bond target of PLN 306.4bn, and a T-bill target of PLN 31.5bn. That compares with the end-July reported totals of PLN 237bn (regular+switching) and T-bills of PLN 16.0bn. The foreign total was given at PLN 56bn, compared with the PLN 48bn done to date.

The following table sums things up:

Question: If the bill is to be split into 5 smaller bills, is the regulation outlined in the bullets point below, the content of the second fiscal package or legislation that will be introduced via these different smaller bills

The question was asked in relation to the following story: Fiscal impact of second set of fiscal measures is RON 3.7bn in 2025

Answer: The government decided to issue five separate bills for covering the second set of fiscal measures, plus another one regulating magistrate's pension reform. Therefore, there are six laws that PM Bolojan will present to MPs and take responsibility of approval. The six planned laws regulate: magistrate's pensions reform, a package of fiscal measures which is described in this article, the healthcare reform, reform of state-controlled companies, salary/personnel adjustments in self-financed state institutions and the regional administration reform.

We wrote about the bill regulating fiscal measures first because it was the only one published for public debate before approval. The others were presented to the public after the government meeting on Friday evening (Aug 29) and we have described them in this article.

The government succeeded to approve all except the bill regulating the regional administration reform because the senior ruling PSD refuses to accept personnel and wage cuts in regional governments (the PSD has the biggest number of mayors and city council members). Politicians are still fighting about this reform and it will be probably approved later than the other five.

Question:

What time are Istanbul protests against the court decision on CHP Istanbul congress today?

Answer:

The rally will take place at 20:30 local time in Zeytinburnu district of Istanbul.

Question:

Has the EconMin released any monthly GDP numbers since the report for March?

Answer:

We have not seen any EconMin reports on GDP after that one on March.

The central bank in July estimated that GDP growth picked up to 1.1% y/y in Q2 2025 from 0.9% in Q1. And the statistics service has been delaying its GDP reports.

The question was asked in relation to the following story: GDP growth slows to 0.5% y/y in March, EconMin estimates

Question:

Does the AtlasIntel poll include a reaction to the Milei scandal? When are we getting polls that could include some reaction?

The question was asked in relation to the following story: Milei's approval down to 44% in Aug, disapproval hits high at 51% - AtlasIntel

Answer:

The bribery scandal began while AtlasIntel was polling, but the issue took a while to gain steam, so even the impact from the initial phase of the scandal was probably not captured in full. Just in case, this doesn't necessarily mean that Milei's approval would be lower if the impact of the scandal were captured in full.

There have been a few other polls over the past seven days, some of which asked directly about the scandal, and we'll share some results below. However, we haven't been covering local polls because the standard is truly abysmal. There are no big pollsters in Argentina, and the ones that pop up with public polls don't have the means to poll nationally, are nearly always funded by political parties or activists who have incentives to spin a non-election poll a certain way, and we never even get the full polls or methodology, just a snapshot of whatever the pollster decides to share. The predictive power of election polls has also been terrible. Not only is the local polling average failing to pick presidential election winners more often than not, but the herding in election polling is so strong that, for example, for the 2023 presidential primary not a single pollster had Milei winning, and not a single pollster came within 5pps Milei's actual vote share.

We are not alone in this sentiment toward the local polling. The defensive behavior we are seeing in the local financial market is in part a reflection of the fact that we are flying almost blind into these elections, and that the consequences for the different outcomes are asymmetrical. To the best of our knowledge, when gauging the elections most of the market relies on fundamentals, media sentiment, AtlasIntel, and the confidence in government index (confidence in government has correlated fairly well with voting support for the ruling party), while not relying much on the local polls, if at all.

Having said all that, here are the three polls released over the last seven days that directly address the scandal:

First, Management and Fit supposedly polled nationally Aug 25-26 to get a quick reaction about the scandal in particular. Some 59% believed the bribery accusations from the recordings are likely to be real, and 35% said the accusations are probably made up to hurt Milei. Some 16.2% of the people polled said they would change their vote as a result of the scandal, which sounds huge, and somehow the pollster downplayed it as "low electoral implications".

Second, the pollster Proyecciones, polling Aug 22-25, so coinciding with AtlasIntel's field work, finds that 12.1% of the voters who voted Milei in the 2023 presidential runoff intend to change their vote due to the scandal, while 23.2% said they don't know. However, the question is framed terribly, so the numbers could include voters who supported Milei in the runoff and are planning to vote a different party for other reasons. We don't know if this was a national poll, and the pollster doesn't even have a website.

Third, the pollster Isasi-Burdman polled Aug 18-29, so field work started a day before the first leak, and finds that only 29% believe the Milei's received bribes, 49% said the scandal is an opposition maneuver, and 45% intend to vote for LLA in the midterm elections.

Question:

Are there any other parties/legislators that have voiced their support for the bill?

The question was asked in relation to the following story: Centrão legislators attempt to push bill that allows dismissal of BCB directors

Answer:

So far, the urgency request has been signed by the leaders of the main Centrão parties: the Progressive Party (PP), União Brasil, Liberal Party (PL), Brazilian Socialist Party (PSB), Republicans, and the Brazilian Democratic Movement (MDB). As the Centrão represents a large share of Congress, these signatures together account for more than 300 lawmakers - above the 257 needed to approve the urgency regime. Meanwhile, former BCB members have been criticizing the measure in the press.

Chamber of Deputies Speaker Hugo Motta has not yet publicly indicated his position on the measure, though there are some behind-the-scenes conversations suggesting he could move the issue forward. However, approval of the urgency request does not necessarily mean the bill will be voted on in the coming weeks, as political maneuvering could still hinder its progress. We note that this development came as a surprise, particularly since the same lawmakers had recently been trying to advance the BCB's financial autonomy bill.

Question:

Could you share the link to this interview that Victoria Rodriguez gave after the formal presentation of the CB's Quarterly Report?

The question was asked in relation to the following story: CB Governor says CB ponders economic cycle in making monetary policy decisions

Answer:

Absolutely, here is the link:

. Q&As begin at minute 48.

Question:

Can you please expand on this "... A similar USD 1.5bn issuance took place this March, though investors only agreed to sell USD 580mn of the outstanding USD 900mn, leaving the govt with more funds than it had initially planned, and supporting a further increase in reserves." ?

There were two private placements this year, of USD 1.5bn and USD 500mn, as per Bloomberg. Could you please explain what investors only agreeing to sell USD 580mn means in this context?

The question was asked in relation to the following story: Forex reserves increase to USD 10.9bn at end-August

Answer:

This refers only to the March 2025 transaction. In that operation, the government issued a USD 1.5bn Eurobond, of which it initially intended to use USD 900mn to repurchase previously issued notes. However, investors only accepted 65% of the repurchase offer (USD 580mn), leaving the government with more funds than initially expected (effectively USD 920mn vs USD 600mn).

The second placement that Bloomberg has is a separate operation, in which the government tapped USD 500mn as the first tranche of a USD 1.5bn commercial financing deal agreed with the UAE in 2024.

Question:

I've seen some reports about 8.7% electricity tariff hikes next April. How much inflationary pressure would it add please?

The question was asked in relation to the following story: Calls grow for NERSA to review Eskom tariff deal that adds to electricity costs

Answer:

Indeed, an electricity tariff increase of 8.76% could materialise as of April next year with most impact due in July when municipalities adjust their tariffs. Considering the 3.44% weight of electricity in the CPI basket, the impact will be worth about 0.3pps on headline CPI, adding some 0.12pps on top of the pressure from the already approved 5.35% hike. Also note that this increase is not yet final as the settlement between the regulator and the utility which it resulted from has not been made a court order yet. There will be a dispute of this. The following years are also impacted, the 8.76% represents only part of the planned increase and the rest is currently deferred to the following couple of years.

You can see more on that issue here and here.

Question:

Could you provide an external borrowing projection for 2026 using the released budget?

The question was asked in relation to the following story: PM submits 2026 budget to parliament, deficit seen at 1.3% of GDP

Answer:

The fiscal framework projects external borrowing at MNT 1.9tn, which is only slightly lower than the 2025 projection (MNT 1.96tn).

Question:

How does this support get financed? Is it in the budget, and will it result in large market bond issuance?

Answer:

The government has not yet provided details on how it will finance the package. The last time they did something similar was back in May, when the government provided KRW 28.6tn support to exporters. Out of that, only KRW 1.5tn was part of the supplementary budget, while the rest was provided through other fiscal channels. So my feeling is they will do something similar this time as well. Here's a link to our article back then:

https://emergingmarketwatch.com/browser#/article/1315836

Note that only KRW 13.6tn from the latest package is emergency support that will be provided in the short term. Here's a table with the breakdown:

The large part of KRW 270tn of the support package is trade insurance, which will be provided by the Korea Trade Insurance Corporation in the form of lower insurance and guarantee fees, while a small part is also set aside for logistics and funding to industries affected by higher tariffs (steel and aluminium mainly). Here's a link to the official press release:

https://www.motie.go.kr/kor/article/ATCL8764a1224/155118956/view

So in essence, I think that very small part of that package will be financed through additional bond issuance on the market. Some of the measures (those related to SMEs) are already part of the 2026 budget, as they were announced earlier in September. These include KRW 2.1tn trade response funding, KRW 200bn for SMEs in the shipbuilding industry and KRW 10.5bn logistics vouchers. In addition, some KRW 4.6tn financial guarantees were also included in the 2026 budget.

The question was asked in relation to the following story: Govt announces KRW 283.6tn support package to counter US tariffs

Question:

"Bhumjaithai will lead a minority coalition, which has 146 MPs allegedly. One of People's Party conditions is that Anutin dissolves the House within four months to organise an early election". Two questions: 1) Given Bhumjaithai will have a minority - will this mean that they won't be able to pass anything over the next 4 months? 2) What is there to force them to actually dissolve in 4 months?

The question was asked in relation to the following story: Pheu Thai's PM candidate Chaikasem vows to dissolve House immediately if elected

Answer:

Question 1. I think that Bhumjaithai will have the support of the People's Party when the interests of the two parties are aligned.

Question 2. If Bhumjaithai reneges on the agreement to dissolve the House in four months, the People's Party can always initiate a no-confidence vote, which Bhumjaithai's minority coalition is unlikely to survive. Probably this is one of the reasons behind one of the other conditions of the People's Party, namely that Bhumjaithai must not pursue the creation of a majority government.