MNB cuts 2018-2019 inflation forecasts, maintains GDP projections

MNB

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The National Bank of Hungary (MNB) maintained its 2.4% inflation forecast for this year and kept its GDP projections unchanged for three years in its fresh quarterly Inflation Report released Tuesday.

The central bank kept its CPI forecast for 2017 at 2.4%. It lowered the forecast for 2018 annual average inflation to 2.5% from 2.8% in the previous report published in June, and cut the forecast for 2019 from 3% to 2.9%.

The MNB is predicting 3.6% GDP growth this year, 3.7% next year and 3.2% in 2019, all in line with its June projections, national news agency MTI reported. 

A chart published yesterday indicates that the MNB has postponed once again the time when it expects CPI to reach its 3% mid-term target by another quarter, to the middle of 2019. The central bank interprets the inflation target in a +/-1% tolerance band.

The MNB noted that, for 2016, it is expecting the Central Statistical Office (KSH) to revise its GDP growth figure of 2% upwards to 2.2%. The bank issued a similar notice in its March and June Inflation Reports.

The Hungarian government forecasts GDP growth to accelerate to 4.1% this year and to 4.3% next year, and predicts inflation at 1.6% in 2017 and 3% in 2018 in an update of the countryʼs Convergence Program.

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