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Hungary: Inflation past the peak, GKI says

This year’s inflation rate has gone beyond its peak and is expected to drop further, research institute GKI said. Agricultural prices, however, will make the process slower. Analysts on economic growth.

The annual inflation rate may be 7.5%, but the actual figure by year end may be 5.5% only, GKI said. GKI also expects the base interest rate of the National Bank of Hungary (MNB) to drop under 7% by year end, the Forint-Euro exchange rate is likely to remain with Ft 250 per Euro, GKI said. Salaries at budget institutions will grow faster, but business companies will increase salaries slower this year, GKI said.

The volume of the Hungarian national economy fell 0.4% in Q2 of 2007 compared to the same period last year. According to Kopint-Tárki Zrt research manager, Attila Bartha, expansion can be seen in sectors that managed to utilize the European economic trend. Public sector investments have dropped significantly, investments concerning domestic consumption only slightly increased, while positive exceptions were the increase in property investments and in processing industry, he added. Bartha expects a moderate recovery in investments, i.e. according to his estimations the volume of investments might reach 2% during the whole course of the year. ((Napi Gazdaság, Gazdasági Rádió)