The National Bank of Hungary lowered projections for all gauges of consumer inflation this year in its fresh quarterly Inflation Report published in full Thursday. The MNB said already on Tuesday that CPI could remain below the 3% mid-term “price stability” target over the full forecast horizon, outlining the main findings of the report. It put average annual CPI at 2.6% for 2013, well under the 3.5% projected in the previous Inflation Report published in December.
The projection for headline inflation was modified after Hungary's year-on-year CPI slowed to 2.8% in February -- the lowest rate in almost seven years -- on the back of a 10% reduction in household gas, electricity and district heating prices.
The full report shows the MNB also lowered its projections for core inflation this year to 4.0% from 5.2%, and for core inflation cleared of indirect tax effects to 2.4% from 3.5%. The central bank stood by its projection for GDP growth of 0.5% this year.It lowered its projection for the general government deficit, calculated according to European Union standards, to 2.9% of GDP from 3.0%.