City analysts divided over chance of rate rise


City analysts remained divided over whether or not the National Bank of Hungary will raise rates from the current 7.50% at a meeting at the end of March.

JP Morgan said in a daily assessment of emerging markets that the NBH would raise rates 25bp in March and another 25bp in the next few months ahead. It said Hungary’s inflation rate would fall from 6.5% in mid-year to 4.8% at year-end. It said that 2009 inflation could be stuck between 3.5% and 4.0%, and a strong forint would be required to bring CPI down to the central bank-government’s 3% mid-term target. Hungary’s twelve-month inflation rate was 6.9% in February, slowing from 7.1% in January.

Goldman Sachs’ London analysts continued to project a combined 150bp rate rise by the NBH at the next three monthly meetings. If the bank wants to come closer to its mid-term inflation target, the forint will have to firm to around 240 to the euro (from its current rate of around 260). If the forint does not strengthen, rates must be raised to meet the target.

Goldman Sachs analysts noted that the elimination of health care co-payments following a referendum on Sunday would take two-tenths of a percentage point off average annual inflation. Ralph Sueppel, of BlueCrest Capital Management, said there is no strong reason to raise rates, as the forint has stabilized, austerity measures are continuing and domestic demand is weak. He said the base rate would remain unchanged and could even fall in the H2 of the year. Dresdner Kleinwort sees the NBH raising rates 50bp at the March meeting. Merrill Lynch puts Hungary’s year-end base rate at 6.75%. (MTI-Econews)


Gloster H1 Revenue Climbs 24% Figures

Gloster H1 Revenue Climbs 24%

V4 Agri Officials: WTO Case Over Grain Bans 'Unfortunate' Int’l Relations

V4 Agri Officials: WTO Case Over Grain Bans 'Unfortunate'

AutoWallis Green Investment Project Value Reaches HUF 3 bln Automotive

AutoWallis Green Investment Project Value Reaches HUF 3 bln

Budapest Muni Council Clears Rác Baths Renovation Tourism

Budapest Muni Council Clears Rác Baths Renovation


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.