The MNB forecast inflation to drop to the 3% official mid-term inflation target in the Q2 of 2010 in its Inflation Report update published on Monday. The MNB projected average annual inflation at 6.3% in 2008 and at 4.1% in 2009, before dropping to 3.0% in 2010.
The MNB’s team of analysts was calculating its fresh inflation forecast with a HUF/EUR rate of 232 for 2009 and 2010 and a Brent oil price of $138 per barrel for 2009 and $137 for 2010, based on the exchange rate and oil price in July. The MNB’s inflation forecasts are conditional ones, using an unchanged central bank base, and based on the exchange rates and oil prices of the month preceding the publication of the forecast.
Kovács said if oil prices do not grow from the present $110-120 per barrel range and the forint keeps its strength, the inflation target could be reached by the end of 2009. He added, however, that under unfavorable conditions inflation could be as high as 3.8% in 2010.
The MNB projected a maximum 7% increase of business sector wages in 2009, and an increase below 7% in 2010, Kovacs said. The MNB forecasts a 7% gas prices (at the beginning of) next year on top of the 10% rise announced for October this year. Gas prices are not expected to rise more than 10% during the whole year as they follow the increase of oil prices with a nine-month delay, Kovács said. (MTI-Econews)
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