Experts Question Transparency and Value of Hungary’s Infrastructure Push

As Hungary embarks on one of its largest waves of infrastructure spending in recent years, industry observers and governance experts are voicing concerns about the programme’s transparency, efficiency, and long-term benefits.

The government has announced plans to revive hundreds of projects in 2025, focusing on highways, rail links, and digital networks. Officials say the investments will drive competitiveness and regional growth. But professionals across the construction, finance, and policy sectors warn that weak oversight and opaque procurement processes continue to undermine confidence in how public funds are used.

Analysts note that infrastructure contracts in Hungary are frequently awarded without sufficient public scrutiny, raising questions about competition and accountability. Critics argue that a lack of disclosure over costs and contractor selection has become a recurring feature of large public projects, increasing the risk of inefficiency and favoritism.

Some of the skepticism centres on high-profile ventures such as the Budapest–Belgrade railway, which has been described as strategically significant but economically uncertain. Experts question whether the investment will generate returns proportional to its cost, especially as freight and passenger volumes along the route remain limited.

Economists also point to an imbalance in regional development. While major highways and cross-border routes receive substantial funding, smaller communities often see little improvement in local infrastructure. This uneven distribution, they argue, deepens existing economic divides between central Hungary and outlying regions.

International watchdogs have also highlighted concerns about corruption and the concentration of political influence in public procurement. Reports suggest that a small number of contractors dominate state-funded construction, which can discourage competition and inflate project prices.

Beyond the financial risks, professionals stress that long-term infrastructure success depends on stronger institutional capacity and independent oversight. Without consistent auditing, project evaluation, and enforcement of fair bidding standards, new investments could repeat past mistakes of cost overruns and delays.

At the same time, environmental and technological priorities remain secondary in many projects. Although the government has pledged to integrate sustainability and digital innovation into transport and energy infrastructure, experts say practical implementation often lags behind political declarations.

Despite the criticism, few dispute the need for investment. Hungary’s transport networks and energy systems require significant modernization after years of underfunding. What divides professionals is not the ambition of the programme, but whether it can be delivered with transparency, balanced development, and value for money.

As one urban planner put it privately: “Hungary doesn’t need fewer roads or railways—it needs better governance of how they are built.”

UK Economy Shows Uneven Growth as Services Hold Firm and Industrial Output Falters

The UK’s latest economic figures for August reveal a divided picture between the services sector and industrial production, underlining the fragile balance within the broader economy.

Official data released this week shows that the services sector, which represents roughly four-fifths of Britain’s economic output, continued to expand modestly through late summer. Professional and technical services, health, and accommodation contributed most to the steady performance. However, the pace of growth remains subdued, with limited momentum from consumer-facing businesses such as retail and hospitality.

In contrast, industrial output showed renewed weakness after signs of recovery earlier in the summer. Manufacturing activity slipped slightly as energy-related production cooled, and supply chain bottlenecks resurfaced across several sub-sectors. Analysts noted that output declines in machinery, transport equipment, and basic metals weighed particularly on August’s industrial figures.

The divergence between services and production highlights the broader structural imbalance in the UK economy. While services have remained a consistent source of growth, the industrial sector continues to lag behind, constrained by high input costs, uncertain demand, and limited investment.

Economists say the overall outlook remains cautious. Businesses continue to report steady but fragile demand, while tighter financial conditions and persistent inflation pressures weigh on confidence. Energy-intensive industries, in particular, have struggled to regain the momentum seen earlier in 2025 when falling wholesale energy prices briefly boosted production.

Despite the mixed results, the economy avoided a significant contraction in August. The gradual rise in services activity helped offset industrial weakness, keeping the UK’s growth trend on a modestly positive path. However, forecasters warn that sustained recovery will depend on stronger business investment, improved productivity, and further easing of inflation-related costs.

As policymakers prepare for upcoming data on GDP and inflation, the August figures serve as a reminder that Britain’s post-pandemic economy remains uneven—resilient in parts, yet vulnerable to headwinds from both global and domestic pressures.

Source: OGL

UK Construction Output Softens in August as Maintenance Work Offsets Declines in New Projects

The UK’s construction industry recorded a slight downturn in August, as weaker activity in repair and maintenance offset limited growth in new building projects. According to the latest official data, the sector’s overall output slipped compared with July, though it remains modestly higher over the broader three-month period.

Analysts say the figures point to a mixed picture for Britain’s builders. Demand for small-scale maintenance and renovation projects held up well, particularly in private housing, while larger developments faced continued headwinds from higher borrowing costs, planning delays, and cost pressures.

The report shows that while construction has avoided a sharp contraction, activity levels remain subdued across several key areas, including infrastructure and commercial building. In contrast, home repair and refurbishment work provided a partial cushion, growing strongly over the summer months and helping sustain output through August.

Over the three months leading up to August, construction volumes edged up slightly, supported mainly by residential maintenance and public-sector repair projects. However, new building work, which accounts for the largest share of industry activity, was flat or declining in most categories, reflecting investor caution amid uncertain demand forecasts.

The data follows the UK’s latest GDP update, which showed the broader economy expanding marginally in August. Construction contributed to that limited growth but remains one of the more volatile components of the economy.

Industry observers note that persistent labour shortages and regulatory barriers continue to weigh on productivity, even as material price pressures have begun to ease. Many contractors remain focused on completing existing projects rather than taking on new ones, particularly in the private sector.

While the headline figures suggest that the industry is stabilising after months of uneven performance, the balance between refurbishment and new investment remains fragile. The coming months will test whether easing inflation and improved financing conditions can revive demand for large-scale developments heading into 2026.

Source: OGL

Vilnius Strengthens Water Infrastructure with €50 Million European Investment Bank Loan

Lithuania’s capital is advancing its water management systems through a new €50 million loan from the European Investment Bank (EIB). The funds will support an extensive modernization program across Vilnius and nearby communities, including upgrades to water supply stations, expansion of wastewater networks, and the rollout of digital monitoring systems aimed at reducing water loss and improving efficiency.

The investment will help Vilniaus vandenys, the city’s main water utility, carry out key infrastructure works through 2028. Among the planned projects are improvements to the Viršuliškės and Šalčininkai stations and the extension of services in growing residential areas such as Gulbinai. Additional construction will include new pressure pipelines and a balancing reservoir to improve wastewater management and reduce environmental impact.

Half of the funding is earmarked for smart infrastructure, such as automated meters and data systems that allow real-time tracking of consumption and leak detection. The initiative also emphasizes sustainability, with the goal of ensuring reliable water service while maintaining affordable tariffs for residents.

Vilniaus vandenys CEO Saulius Savickas said the upgrades will enhance long-term resilience and service reliability in the face of rising demand and climate pressures. The EIB, which has supported numerous infrastructure projects in Lithuania, described the loan as part of its wider effort to promote clean water and environmental protection across the European Union.

The project aligns with EU-backed climate objectives under the InvestEU framework, which aims to accelerate sustainable development across member states. By 2028, the improvements are expected to expand coverage, improve water quality, and strengthen Vilnius’s ability to adapt to changing weather patterns.

Comparable EIB projects across Europe—such as those in Athens, Riga, and Berlin—highlight the growing trend toward modernizing urban water systems to balance growth with environmental responsibility. With this new financing, Vilnius joins that effort, focusing on smarter networks and greener infrastructure to secure its water future.

Source: EIB

Croatia’s Inflation Rises to 4.2%, Reaching Highest Level Since 2023

Inflation in Croatia picked up again in September, reaching 4.2% year-on-year, its highest level since late 2023, according to data from the Croatian Bureau of Statistics. The figure marks a slight increase from 4.1% in August, confirming preliminary estimates released earlier this month.

The main drivers behind the uptick were higher prices in housing, utilities, and energy, which recorded some of the sharpest annual gains. Food and non-alcoholic beverages also continued to rise, though at a slower pace than in previous months.

On a monthly basis, consumer prices rose 0.4% compared with August, suggesting steady upward pressure across several categories despite easing inflation in some essentials. Non-food goods excluding energy saw one of the largest month-to-month increases, while prices for services and food showed modest declines.

The inflation pattern reflects a mix of domestic and imported pressures. While global energy costs have stabilized, housing and utility prices in Croatia remain elevated, rising by nearly 9% compared with the same month last year. Food prices, up about 5.7% year-on-year, continue to strain household budgets, though the pace of growth has eased slightly.

The country’s harmonised inflation rate, which allows for EU-wide comparison, stood at 4.1%, underscoring that Croatia’s price growth remains above the euro area average. Cumulatively, consumer prices increased 3.4% from January to September, while the 12-month average inflation rate for the period from October 2024 to September 2025 was 3.8%.

Economists note that the latest figures confirm a gradual slowdown from the high inflation peaks seen in 2022, but the persistence of energy and housing costs continues to delay a return to the European Central Bank’s 2% target. Croatia’s inflation trajectory in the final quarter of 2025 will likely depend on global energy markets, domestic wage pressures, and the pace of consumer demand.

Inflation in Slovakia Accelerates Slightly to 4.3% in September 2025

Consumer prices in Slovakia rose faster in September, with inflation edging up to 4.3% year-on-year — the second-highest level recorded this year, just behind July’s 4.4%. The increase was driven mainly by higher fuel and beverage prices, as well as persistent cost growth in restaurants, cafés, and canteens. However, food and housing prices showed signs of moderation, providing some relief to households.

Month-on-month, consumer prices grew by 0.2%, marking a slight acceleration compared to August. According to the Statistical Office of the Slovak Republic, price growth was registered in eight of the twelve monitored expenditure categories, with the steepest rise of 3.7% in the education sector, coinciding with the start of the new school year. The most significant increases were observed in secondary education fees, up by 8.6%, while kindergarten, primary, and language course fees also climbed.

The catering and hospitality sector recorded the third-highest increase of the year, with prices up 0.9% overall. Canteen meal costs rose by 2.3%, and restaurant services also saw steady increases. Meanwhile, bank fees pushed prices in the miscellaneous goods and services category up by 0.7%, reflecting a 3.8% rise in financial service costs.

On the other hand, food prices fell for the first time in five months, down 0.4% month-on-month, thanks to lower costs of vegetables (-2.5%), confectionery (-1.5%), and bread and cereals (-0.4%). Meat and cooking oils were also cheaper, although milk, cheese, and eggs became more expensive. Non-alcoholic beverages rose by 0.9%, continuing their upward trend.

Transportation costs decreased by 0.4% overall, as air travel became more affordable despite rising fuel and passenger transport prices. A similar 0.4% decline occurred in recreation and culture, mainly due to cheaper package holidays and office supplies.

Compared to September 2024, prices were higher in all twelve expenditure groups. Education saw the strongest growth at 9.8%, followed by restaurants and hotels, and financial and insurance services. Transport prices increased 4.2% year-on-year, reversing several months of declines, as rising fuel prices once again began to push inflation higher.

Food and non-alcoholic beverages — which account for the second-largest share of household spending — rose by 3.6% annually, a slower pace than in previous months. Within that category, milk, cheese, and eggs jumped more than 9%, while bread and cereals rose 1.6%. Vegetable and fish prices fell, while non-alcoholic beverages surged more than 20%, marking a record increase.

Core inflation, which excludes volatile and regulated items such as energy and taxes, stood at 3.6% in September, while net inflation — excluding food prices as well — was 3.5%. Month-on-month, both indicators showed modest increases.

For the first nine months of 2025, overall inflation averaged 4.1%. Despite the slight acceleration in September, analysts note that the broader inflation trend remains moderate compared to the peaks of 2023, when food and energy prices surged amid global market instability.

Source: SOSR

Serbia Sees Modest Drop in Building Permits as Construction Momentum Slows

Serbia’s construction sector showed signs of easing in August, as the number of building permits issued slipped slightly compared to the same period last year, according to the latest data from the national statistics office.

Authorities issued 2,542 permits in August, representing a small decline of just over one percent year-on-year. Despite the drop, overall activity in residential and infrastructure development remains steady, indicating that the slowdown is moderate rather than structural.

Most permits – close to nine out of ten – were granted for building projects, primarily residential construction. The remainder covered civil engineering works, including energy, utility, and transport infrastructure. Within that category, the largest share related to pipeline and power line installations, reflecting continued investment in essential infrastructure.

Residential developments continue to dominate the market, accounting for more than four-fifths of total building permits. The number of non-residential permits, including offices and industrial spaces, remained relatively small but stable compared with last year.

Construction industry analysts note that Serbia’s permitting activity has fluctuated in recent months, reflecting mixed conditions in both private investment and public infrastructure spending. Some developers have delayed new projects amid higher financing costs, while public authorities have focused resources on strategic infrastructure such as road and utility upgrades.

Even with the modest decline in August, the longer-term trend still points to steady urban growth. The combination of rising housing demand, ongoing regional development programmes, and infrastructure modernisation under the national investment plan continues to support the sector’s resilience.

Source: SORS

Bulgaria’s Inflation Picks Up Again, Signalling a Return of Price Pressures

After several months of relative calm, Bulgaria’s inflation rate rose to 5.6 % in September 2025, its highest level since the beginning of the year. The increase, confirmed by the National Statistical Institute (NSI) and multiple economic outlets, reflects renewed cost pressures across key consumer sectors even as prices fell slightly on a month-to-month basis.

Compared with August, consumer prices in September dropped by 0.8 %, but the year-on-year data shows a clear uptick from the 5.3 % recorded the previous month. The NSI report highlights that education costs jumped by 4.5 % and clothing by 1 %, while the biggest declines were seen in recreation, restaurants, and food prices.

Bulgaria’s Harmonised Index of Consumer Prices — used for EU comparisons — shows a milder annual rise of 4.1 %, suggesting that domestic inflation is running ahead of broader European trends. From January to September, prices rose by about 3.4 % in total, while the average inflation for the past 12 months stood at 3.8 %.

This marks a noticeable shift from last year, when inflation cooled to around 2.4 % after a turbulent period. The 2025 rebound, though still modest compared with the double-digit surge of 2022, signals that inflationary forces are proving difficult to tame.

In historical context, the current rate remains moderate: consumer prices grew by just 1.2 % in 2020, 3.3 % in 2021, and then spiked dramatically to more than 15 % in 2022 amid soaring energy and food costs. The following year brought relief as inflation dropped to around 9 %, and by 2024 it appeared largely under control.

Economists say this year’s rise reflects a mix of domestic and external factors — from higher service costs and wage pressures to the lingering impact of global food and energy markets. While Bulgaria’s inflation is still well below the levels that once gripped its economy, the September figures suggest that price growth remains stubbornly above the comfort zone for both consumers and policymakers.

The government and central bank are now watching closely to see whether this latest acceleration proves temporary or marks the start of another inflationary wave. For Bulgarian households, it is another reminder that while the pandemic-era shock may have passed, the era of cheap living has not fully returned.

International Campus Secures €313 Million Refinancing for German Residential Portfolio

International Campus Group (IC), a major investor and operator in student housing and urban living, has completed a €313 million refinancing package for nine properties in Germany. The deal covers seven assets under its “The FIZZ” brand and two “HAVENS LIVING” properties aimed at young professionals.

The financing was arranged with BNP Paribas and Société Générale as lending partners. It includes an initial two-year term, with the option of three one-year extensions, giving the group greater flexibility for portfolio management and future growth.

IC received legal advice from Gibson Dunn, Greenberg Traurig, and Stibbe Advocats. Additional advisory roles were held by EY (tax), CBRE (valuation and technical due diligence), and Marsh McLennan (insurance).

Patrick Hanisch, CFO of International Campus Group, said the refinancing ensures financial stability at a time of tighter credit conditions. “The agreement provides both flexibility and planning security for our ongoing development,” he noted.

Representatives from both banks highlighted the transaction as part of their ongoing commitment to support the growing student accommodation sector. Société Générale emphasized the group’s consistent strategy and strong market position, while BNP Paribas described the partnership as a continuation of its support for residential and purpose-built student housing across Germany.

The refinancing reinforces International Campus’s role as one of Europe’s established providers of professionally managed housing for students and young professionals, amid continued demand for affordable and high-quality living options in university cities.

HIH Invest Expands Logistics Portfolio with New Acquisition in Pfaffenhofen

HIH Invest Real Estate has strengthened its logistics portfolio with the purchase of a newly completed property in Pfaffenhofen an der Ilm, Bavaria, for its HIH Deutschland+ Core Logistik Invest fund. The 12,500-square-metre facility, developed by the Intaurus Group, was finalised in June 2025 and is fully leased to New Flag GmbH, a Munich-based international distributor of hair and beauty products. The purchase price remains confidential.

Located in the Kuglhof industrial park at Schäfflerstraße 14, the site benefits from direct access to the A9 motorway and lies roughly 40 kilometres from Munich Airport. The building comprises 10,200 square metres of warehouse space, 1,330 square metres of mezzanine, and 910 square metres of office and social areas, complemented by 57 parking spaces. New Flag GmbH has signed a ten-year lease with an option to extend.

Designed to meet DGNB Gold Standard sustainability criteria, the property features a photovoltaic system and a heat pump for energy efficiency. Its modular design allows for flexible future use, with the potential to divide the premises into two independent units.

“Pfaffenhofen is an ideal logistics location,” said Maximilian Tappert, Head of Transaction Management Logistics at HIH Invest. “Its proximity to Munich and Ingolstadt, coupled with competitive rental levels, makes it especially appealing to companies in e-commerce, pharmaceuticals, and industry.”

Andreas Strey, Co-Head of Fund Management and Head of Logistics at HIH Invest, emphasised the long-term stability of the investment: “The combination of a prime location in southern Germany and sustainable construction standards ensures strong tenant appeal and reliable income for our investors.”

Representing the seller, Oliver Raigel, Managing Director of Intaurus Group, highlighted the partnership: “We are pleased to have delivered a state-of-the-art logistics property that aligns with modern ESG requirements. Our collaboration with HIH Invest was built on trust and professionalism.”

This acquisition marks the eighth addition to the HIH Deutschland+ Core Logistik Invest fund, which now holds assets in both Germany and the Netherlands. The vehicle targets a portfolio volume of at least €300 million, focusing on modern core logistics assets with strong third-party usability and high sustainability standards. Around 70% of the fund’s capital is allocated to Germany, with the remainder invested in neighbouring markets including the Netherlands, France, and Austria.

Due diligence for the transaction was conducted by Baker Tilly (legal and tax) and JT Solutions (technical and ESG), while Realogis acted as broker. The Intaurus Group received legal advice from Glock Liphart Probst & Partner.

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