Csányi declares end to 'era of cheap money'

"The good news is that there's still credit: the financing of the economy continues," Csányi told guests at the Agrár Gála.

He said interest rates could climb "as high as 7%" and augured a slowdown in the rate of inflation to the 2-4% National Bank of Hungary (MNB) tolerance band no sooner than 2024.

Hungary's GDP growth could slow to 3.5pc this year, while the current-account deficit could reach 8% of GDP as energy prices climb and the automotive industry's "bumpy ride" continues, he added.

Csányi said energy prices are expected to remain high "for the long term". "There's nothing to do but adapt," he added.

He said the government's regulated utility price scheme for retail consumers is "not good", explaining that households, as well as businesses, "must feel the burden, too, so they save".

Csányi said a HUF 500 billion fiscal adjustment would be necessary for the government to reach its 4.9%-of-GDP general government deficit target this year, if an agreement on Hungary's European Union funding is reached. If that funding doesn't arrive, a HUF 1.7 trillion adjustment will be needed, he added.

He projected a "speedy recovery" if the transfers from Brussels arrive and the war in Ukraine ends.

He acknowledged the war would cut into OTP's earnings, earlier expected to reach as much as HUF 600 bln this year, but said the lender is "operating stably" in spite of its exposure in both Russia and Ukraine. He noted that just 6-7% of OTP's EUR 70 bln balance sheet is in Russia, while its business there generates only 15% of profit.

In addition to heading Hungary's biggest commercial lender, Csányi is the owner of Bonafarm, an integrated agribusiness that controls some of the country's biggest food brands.

Agriculture Minister István Nagy told guests at the gala that the biggest task facing the sector this year is the approval of the EU's common agricultural policy (CAP) for the period after 2023, in addition to managing the crisis caused by the war in Ukraine.