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Coronavirus Roundup: Mask-wearing, Q3 Contraction and EU Funding Approval

As the second wave of the coronavirus pandemic continues in Hungary, the wearing of masks at outdoor sports and cultural events has also become mandatory.

The government decree includes sanctions both for those who fail to comply and for event organizers. Previously, mask-wearing was only compulsory in shops, theaters, cinemas, museums and shopping malls, as well as on public transport.

Due to the prolonged effects of the coronavirus pandemic, data available so far suggest that Hungary’s economy contracted in the third quarter compared to the same period a year earlier, Gergely Gulyás, the head of the Prime Minister’s Office, said fielding a question at a regular press briefing, according to state news agency MTI.

Gulyás said the government has “partial information, but no concrete numbers” on Q3 GDP, but added that it was “certain” the economy contracted.

Meanwhile, Minister of Finance Mihály Varga said at an annual hearing before a parliamentary committee that the GDP of Hungary could fall by 6.4% this year and economic trends could start to change for the better from Q2 2021, were a vaccine against the coronavirus to be available at that time.

To bolster increased spending on government measures to preserve jobs threatened by the crisis, the Council of the European Union has approved EUR 504 million in financial support for Hungary under the SURE instrument, according to the Ministry of Finance Ministry.

The preferential credit will be used to refinance the cost of job preservation and workplace health safety measures introduced after February 1, the ministry said. Half of the credit will be disbursed in 2020 and the rest early in 2021, it added.

The ministry noted that 900,000 Hungarians have benefited from workplace preservation, job creation and training support programs since the start of the coronavirus crisis.

Industry Losses

Different industries have been noting the losses they’ve incurred so far this year. Magyar Posta expects sales revenue to drop 10% this year as turnover in conventional services, letters, postal cash transfers, dropped by more than 30% in April due to the effects of the pandemic, CEO György Schamschula said in an interview with daily Népszava (Word of the People).

Revenue of Hungarian baths has fallen at least 50% this year because of the pandemic, and 76% of baths and spas will become insolvent by next spring without assistance, the head of the Hungarian Baths Association László Attila Boros said.

Advertising industry insiders expect a big drop in revenue this year, according to the latest survey by the Hungarian Advertising Association (MRSZ), although not quite of the scale projected in the previous survey conducted in the spring.

Sales volume of Hungary’s five biggest brewers fell 5.5% to 4.9 million hectoliters in January-September from the same period a year earlier, according to Sándor Kántor, the head of the Hungarian Brewers Association (MSSZ).

The most notable impact recently has been in construction and real estate. Output of Hungary’s construction sector fell 13.6% year-on-year in August, according to data released by the Central Statistical Office (KSH). KSH data also indicates that resale home prices were down by 6.3% annually in the second quarter, which is the biggest drop in prices in the past five years.

Yields on the rent of investment housing may have fallen by as much as 25% in 2020 compared to a year earlier, according to Takarékbank. Take-up on Budapest’s office space market reached 247,000 sqm in Q1-Q3, the lowest level since 2013, according to an analysis by property consultancy Eston International. Alone in Q3, take-up dropped 59% as lease extension volume plunged 76%, Eston said.