ADVERTISEMENT

Policymakers agree upside inflation risks persist, minutes show

MNB

Members of the Monetary Council of the National Bank of Hungary (MNB) agreed that upside inflation risks persist and reiterated their readiness to respond with appropriate measures at a monthly policy meeting in April, according to a report by state news wire MTI.

"Decision-makers agreed that upside risks to price stability persisted. In members' assessment, the increase in risk aversion vis-a-vis emerging markets and potential second-round effects following the restart of the economy posed the greatest risk in terms of inflation developments," the minute of the meeting released on Wednesday show.

"Some members also noted that a general pick-up in the global economy and the significant rise in commodity prices in 2021 might result in further spikes in inflation," according to the minutes.

Policymakers agreed that the successful reopening of the economy was "largely affected" by inflation developments, "therefore, the appropriate response had to be given to increasing
upside risks to price stability".

Council members agreed that an increase in inflation was "primarily shaped by temporary effects" and augured a "more pronounced" fuel price effect in April and May, because of a low base and rising oil prices early in 2021, but reiterated that CPI would return to the central bank's 3% +/- one-percentage-point tolerance band "in the summer months".

The Central Statistical Office (KSH) released April CPI on May 11. Headline inflation for the month climbed to 5.1%.

Council members agreed that the MNB's next quarterly Inflation Report, which they will discuss at a policy meeting in June, would be "key" to assessing inflationary risks linked to the reopening of the economy.

The Council voted unanimously at the meeting on April 27 to keep the central bank base rate unchanged at 0.6%.

ADVERTISEMENT

MKIK: Local business tax should be maintained Analysis

MKIK: Local business tax should be maintained

Parl't votes to phase out savings coops integration framewor... Parliament

Parl't votes to phase out savings coops integration framewor...

Roche Szolgáltató appoints P&C business partner lead Appointments

Roche Szolgáltató appoints P&C business partner lead

Budapest airport shuttle bus service expanded City

Budapest airport shuttle bus service expanded

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.