Varga: CPI will stay down, Hungary junk rating “a joke”
The rate of consumer price inflation in Hungary will not rise significantly even after the effect of utilities price cuts wears off, National Economy Minister Mihály Varga said on public television on Wednesday.
Varga conceded that government-mandated utilities price cuts that will save Hungarians 20% on their bills this year had done much to bring CPI under 1%, but told broadcaster M1 that inflation would not “take off” even after the effect of the reductions passes.
He reiterated the government’s estimate for average annual inflation of 2.4% next year, well under the National Bank of Hungary (MNB)’s 3% mid-term target for “price stability”.
Hungary’s CPI was 0.9% in November, the Central Statistics Office (KSH) said on Wednesday, a near 40-year low.
Varga said the Hungarian economy was performing better and better, and fiscal revenue was also improving. He called Hungary’s “junk” sovereign rating “a joke” and expressed hope for upgrades in 2014.
He noted that auctions of government securities had been 5-6 times oversubscribed recently.
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.