MNB: Inflation Expected to Fall to 6% by Year-end
Photo by noppawan09/Shutterstock.com
Hungary's inflation rate is set to fall to around 6% by year-end, level with the average for the region, the National Bank of Hungary (MNB) said in a quarterly study published on its website last week.
In its Inflation Report, the central bank acknowledged a combination of disciplined monetary policy, government measures to spur competition, subdued domestic demand, and a lower external cost environment for the drop in the Consumer Price Index from a peak of 25.7% in January.
The MNB said "robust" disinflation would continue in Q1 2024 before decelerating. It put average annual inflation at 17.6-17.7% for 2023 and 4-5.5% for 2024.
Presenting the report, András Balatoni, an MNB director, said disinflation would slow from Q2 2024 on the back of tax measures and the end of base effects. He added that inflation is expected to return to the MNB's 2-4% tolerance band in 2025. He said a gradual pickup in domestic demand could support an acceleration of broader-based economic growth from 2024.
Falling inflation, growing real wages, a gradual recovery of confidence and an expected pickup in lending could help that trend, he noted.
Balatoni argued that, despite the economic downturn, Hungary's labor market had remained stable and at close to full employment. The jobless rate is expected to fall, he added.
Government Acknowledges Drop in Motor Fuel Prices
EU Affairs Ministry, AmCham Sign Strategic Partnership Deal
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
