MNB reduces inflation forecast

MNB

The National Bank of Hungary (MNB) reduced its inflation forecast for both 2014 and 2015, the main figures released on Tuesday from its fresh quarterly Inflation Report show, according to news agency MTI. 

The central bank cut its forecast for average annual inflation in 2014 to minus 0.2% from a 0.1% increase projected in the previous, September report. It now forecasts 2015 average inflation at 0.9%, sharply down from 2.5% projected in September. The MNB forecasts 2016 inflation to average 2.9% annually, that is approaching the central bank's 3% midterm target. It is the bank's first forecast for 2016.

The central bank left its projection for 2014 GDP growth unchanged at 3.3% while it cut the forecast for 2015 GDP growth slightly, to 2.3% from 2.4%. The MNB projects GDP growth to slow moderately to 2.1% in 2016. The reduced inflation forecast came after consumer prices were down 0.2% year-on-year in January-November according to recently released data of the Central Statistics Office (KSH). Hungary's GDP rose 3.6% in the first three quarters from a year earlier.

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