Romania vs. Hungary: the race to the bottom on taxes
Romania and Hungary have recently announced another round of tax cuts and fiscal measures effective from this year. In the short term, these measures lift the prospects for consumption and the real estate market. Inflation risks are also rising, but not enough to trigger an increase in the policy rates in 2017, in our view, although the interbank rates may start converging to the policy rate in Romania. For the sovereign credit outlook, in our view, the Hungarian announcements should be positive on the margin as Hungary’s potential growth should benefit from the lower corporate tax rate. On the other hand, in Romania, we see a risk that its investment grade status may be called into question in the coming years due to weakening fiscal prudence and policy uncertainty surrounding the FX loans legacy.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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