ADVERTISEMENT

Central Bank raises inflation forecasts, cuts provisional GDP growth figure

Food

The Hungarian Central Bank (MNB) raised its annual inflation forecast to 7.6% opposed to the 7.3% released in May. MNB decreased its provisional figures for the annual growth of the GDP from 2.5% to 2% yesterday.

The 2008 figure was also increased to an average 4.5% from the earlier 3.6%. The negative figures are motivated by the recent rise in the price of oil and food products, MNB said. While these factors contribute to prospects falling short of expectations in 2007 and 2008, the economy is likely to slightly outperform mid-term targets by 2009, MNB said. Accordingly, MNB slashed its 2009 inflation forecasts from the 2.8% of May to 2.4%.

MNB decreased its provisional figures for the annual growth of the GDP from 2.5% to 2% yesterday. The decision is motivated by the disappointing growth of a mere 1.4% in Q2 compared to last year, as well as other factors indicating that growth may revert to a sluggish pace. Consequently, MNB also reduced the 2008 growth forecast form the 2.8% published in May to 2.7%, while leaving the 2009 figure of 3.4% untouched.

The Central Bank report notes that the Hungarian economy recently sustained temporary setbacks, such as frost and drought hitting the agriculture and food sectors. The more significant, long term risks that provide greater cause for concern are the latest figures on construction output and state spending.

Hungary’s central bank on Monday as expected held the base interest rate at 7.75%, with observers saying that the decision was most likely due to jitters on global capital markets. (Gazdasági Rádió, Magyar Hirlap, Napi Gazdaság)

ADVERTISEMENT

Digitization, sustainability among characteristics of future... Analysis

Digitization, sustainability among characteristics of future...

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

Magyar Bankholding chairman to serve as CEO as well Appointments

Magyar Bankholding chairman to serve as CEO as well

ITM, capital gov't agree on support for public transport City

ITM, capital gov't agree on support for public transport

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.