Rate-setters expect CPI to 'fall gradually' from November peak

MNB

Photo by noppawan09/Shutterstock.com

The Monetary Council of the National Bank of Hungary (MNB) said CPI peaked in November and is expected to "fall gradually" from December, as short-term developments in inflation are determined by the fading impact of base and tax effects, a cap on vehicle fuel prices and the extent of repricing at the beginning of the year, according to a release on the website of the central bank.

Inflation is expected to return to the central bank's 2-4% tolerance band in the fourth quarter of 2022 before reaching the 3% mid-term "price stability" target in the first half of 2023, the policymakers said after a review of the central bank's latest quarterly Inflation Report.

Core inflation, which excludes volatile food and fuel prices, will rise in the coming months and "be close to 6%" by mid-2022, lifted by higher commodity and energy prices, as well as by higher freight costs and supply-chain disruptions.

The primary projections of the Inflation Report, published after the meeting, show average annual CPI reaching 5.1% in 2021.

The report includes forecast ranges for CPI in the following two years: 4.7-5.1% for 2022 and 2.5-3.5% for 2023. The report forecasts GDP growth of 6.3-6.5% for 2021 and 4%-5% for 2022. Risks to inflation "continue to be on the upside," the council said.

ADVERTISEMENT

Sharp Rise in Energy Costs Putting Strain on Competitiveness Analysis

Sharp Rise in Energy Costs Putting Strain on Competitiveness

Parl't approves 2023 budget Parliament

Parl't approves 2023 budget

Danubius Hotels Appoints Group Director of Development Appointments

Danubius Hotels Appoints Group Director of Development

3 Downtown Districts Planning to Introduce 30 km/h Speed Lim... City

3 Downtown Districts Planning to Introduce 30 km/h Speed Lim...

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.