According to the baseline projection in the MNB ‘s latest quarterly inflation report, the 3% “price stability” target could be met by the end of 2012 without any further tightening, Simor said. There are risks, such as cost shocks resulting from higher oil prices which are now muted because of low domestic demand and high unemployment.
Hungary’s banking system is resistant to shocks, but is not able at present to support a pick-up in the economy, Simor noted. Banks’ ability and propensity to lend are both weak, he added.
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