Improved growth outlook limits scope for rate cuts
Emerging market analysts in London expect the improved growth outlook for Hungary to limit the scale of the central bank's easing cycle. Analysts at BNP Paribas said in a fresh assessment on Friday that they project Hungary's GDP will grow 0.7% this year, instead of contracting 0.4%, as expected earlier. The change followed the publication of better-than-expected Q1 GDP data in the previous week. he analysts said the MNB's easing cycle, started last August, was likely to bring the base rate no lower than 4.00%, 50-75bp higher than the market is pricing in at present.
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