ADVERTISEMENT

Latest CPI gives central bank good reason to leave rates unchanged, analysts say

Food

Analysts polled by MTI on Tuesday after the publication of November inflation figures, which were largely in line with expectations, said the fresh figures were likely to prompt the National Bank of Hungary (MNB) to keep rates on hold at a meeting on December 18, though the bank's MPC could continue with its campaign of rate rises in January.

Consumer prices rose 6.4% year on year in November and were up 0.2% from October, the Central Statistics Office (KSH) announced on Tuesday.
Erste Bank Zrt's Orsolya Nyeste said the inflation figures came as no surprise. She added that the 4.6% twelve-month rise in core inflation shows the effect of the government's austerity measures. She projected prices would continue to rise, to peak over 8% in Q2 2007, followed by a slowdown. The central bank will probably leave rates on hold in December, but they could raise them at the first rate-setting meeting in January, she said.
HVB Bank Zrt's Márta Szegő also said a 25bp rate rise was more likely in January than in December. She added that the bank might still hold off if the forint continues to trade between 254 and 257 to the euro. Szegő said the 1.4% rise in food prices from October to November was remarkable. She attributed the increase to the jump in seasonal produce prices as the forint weakened in July through September. Meat prices, she said, have risen to their level from a few years ago. Clothing became more expensive and consumer durable prices stagnated in November, unlike in previous months when both fell, she said. Szegő put year-end inflation at 7% and average annual inflation at 3.9%-4%. In January, inflation could pick up, with household energy prices rising as much as 2%-2.5% on the back of another increase in centrally regulated prices. She said inflation would peak around 8% mid-year, but year-end inflation could fall back to 4%, she said. She projected average annual inflation of 6.3%-6.5% in 2007.

 

ADVERTISEMENT

IMF raises Hungary 2021 GDP growth forecast to 7.6% Analysis

IMF raises Hungary 2021 GDP growth forecast to 7.6%

Parliament approves amendment to Competition Act Parliament

Parliament approves amendment to Competition Act

New CEO announced at Codic Hungary Appointments

New CEO announced at Codic Hungary

Budapest bike-sharing scheme boasts record ridership City

Budapest bike-sharing scheme boasts record ridership

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.