Analysts: MNB rate cuts still possible this year
Image by Jessica Fejos
Hungaryʼs central bank may embark on a new rate cutting cycle this year amid floundering growth and inflation prospects, London-based emerging markets economists said on Friday.
(Photo: Jessica Fejos)
In its weekly “CEEMEA Compass” report on emerging markets, released to clients in London, Morgan Stanley said it sees growth reaching 2.2% this year, after being at 2.6% in 2015, which is “somewhat lower than in our previous forecast (of 2.9%)”.
“Hungary continues to enjoy a recovery in domestic demand from depressed levels, but it has somewhat less momentum than we anticipated”, Morgan Stanley analysts noted.
“The MNB has in the past often revisited its monetary stance in the face of new information... and oil futures are almost 20% lower than at the publication of the last Inflation Report, and December inflation at 0.9% is tracking below the MNB estimates”.
Although cuts in the base rate “seem to have gone out of favor, they certainly remain possible, in our view, though January seems way too soon... We still forecast the policy rate at 1% by mid-year from the current 1.35%”, Morgan Stanleyʼs analysts added.
ADVERTISEMENT
Households Make Net Withdrawals in April
Parl't Approves Amendments to Legislation on Judiciary
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.
