However, “ongoing deleveraging and a challenging investment backdrop keep us cautious on (longer-term) growth prospects – we see Hungary continuing to underperform the rest of CEE in 2015 too (with) 1.3% growth (in that year) versus 2.5% in the Czech Republic and 3.2% in Poland.”

On the monetary policy front, the path for policy rates is clearly determined by the external backdrop, but the MNB still has an overall dovish bias. If the risk backdrop “can just about hold in, we believe that one should consider cuts of 15 bp to 20 bp the ‘new norm’, instead of 10 bp, our previous view.”

Even against the backdrop of volatile markets, it now seems likely that policy rates “may reach our target of 3.50% in the next couple of months already; our previous forecast was December.” And if risk stays reasonably constructive into the fourth quarter, a 3% terminal rate would not be out of the question either, Morgan Stanley’s London-based economists said in the report.