Economic growth this year will continue to be driven by domestic consumption, investments and exports, the forecast said. Both investments and export growth are set to slow, it added.

Wages in real terms will continue to increase, but at a slower pace than before. The unemployment rate will be broadly stable, with the number of employed staying at a peak level and firms in the corporate sector will continue to face labor shortages.

Inflation could be around 3.4% in 2020 and 3.2% in 2021. Core inflation could rise to 4% in 2020 with core inflation excluding tax effects reaching around 3.5-3.6%.

Analyst Lajos Török said the National Bank of Hungary could stick to an accommodative monetary policy in 2020. The central bank could start tightening monetary policy only in 2021 and before raising the base rate it will first step back from its non-conventional measures.

The euro could trade around 330 to 340 against the forint for the foreseeable future with the exchange rate occasionally rising above 340.