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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