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MNB puts CPI 'mostly above' tolerance band till year-end

MNB

MNB headquarters in Budapest.

Photo by Andocs / Shutterstock.com

National Bank of Hungary (MNB) policymakers said inflation "is likely to stay mostly above" the central bank's 2%-4% tolerance band until the end of 2021, commenting on the MNB's fresh quarterly Inflation Report after a monthly policy meeting on Tuesday, according to a report by state news wire MTI.

MNB raised its forecast for annual average inflation this year to 4.1pc in the latest report from 3.8%-3.9% in the report released in March.

"After the spike in the second quarter, the consumer price index is expected to fall close to 4% at a slower-than-expected pace during the summer months before rising slightly again at the end of the year," the MNB's rate-setting Monetary Council said.

"Due to base effects, inflation is expected to fall back into the central bank's tolerance band again at the beginning of 2022 and to stabilize around the [3%] central bank target from mid-2022 as a result of monetary policy measures," the policymakers added.

The report's main forecasts show CPI slowing to 3.1% in 2022 and to 3% in 2023.

MNB raised its forecast for GDP growth this year to 6.2% from 4-6% in the March report. It puts GDP growth at 5.5% in 2022 and 3.5% in 2023.

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