Hungarian central bank knocks down GDP and raises inflation forecasts
Consumer prices in Hungary grew by an annual 8.6 percent in March, the worst inflation figures in Hungary in 15 years.The Hungarian National Bank (MNB) has hiked its inflation forecast for this year to an average of 7.5-9.8%, up from 4.7-5.1% in December, and slashed its growth forecast to 2.5-4.5% from 4-5%, as the country braces for the full impact of Russia's invasion of Ukraine on commodity prices and global growth.
In its quarterly inflation report on March 24, the bank explained the radical revision of its forecasts on supply side effects and price shocks from higher commodity and energy price. Yet it added that with the fading of the first-round effects of war tensions, the decrease in external inflationary effects as well as a result of the central bank’s proactive measures, headline inflation would be 3.3-5% in 2023 on average, returning to the central bank tolerance band of 2-4% in H2 2023, before reaching the 3% target a year later. However, the outlook for inflation is mostly surrounded by upside risks, they added.
bne IntelliNews - Hungarian central bank knocks down GDP and raises inflation forecasts