Economy
Hungary FinMin says CPI should fall, but not hurt growth
“It is (in) the interest of the Hungarian economy that inflation should gradually, with no substantial growth sacrifice, decrease to below the Maastricht criterion level by 2008," Draskovics told the Hungarian parliament's budget committee.
Hungary's average annual inflation is expected at 6.8%-6.9% in 2004, and 4.5% in 2005, Draskovics added.
Hungary's inflation must not exceed by more than 1.5 percentage points the average inflation of the three best performing member states in 2008 if it wants to adopt the euro in 2010.
Draskovics said they were pleased that the National Bank of Hungary (NBH) was ready to accept the 2006 inflation target the government set out in its convergence plan it submitted to the European Union in May when Hungary joined the EU.
The convergence programme aims to reduce annual average inflation by 0.5% annually from 2005 onward. It also says December year-on-year inflation should fall by half a percentage point per year, down from the 4.0% target planned for December 2005.
That means an inflation goal of 3.5% for end-2006.
On Tuesday a Hungarian central banker said the bank was unwilling to allow a depreciation of the forint to create upward pressure on inflation.
Deputy NBH Governor Péter Adamecz said that although the government would accept higher inflation as a consequence of a lower prime rate and a weaker currency, it (higher CPI) “would not fit into [the central bank's] mandate."
Hungary's average annual inflation is expected at 6.8%-6.9% in 2004, and 4.5% in 2005, Draskovics added.
Hungary's inflation must not exceed by more than 1.5 percentage points the average inflation of the three best performing member states in 2008 if it wants to adopt the euro in 2010.
Draskovics said they were pleased that the National Bank of Hungary (NBH) was ready to accept the 2006 inflation target the government set out in its convergence plan it submitted to the European Union in May when Hungary joined the EU.
The convergence programme aims to reduce annual average inflation by 0.5% annually from 2005 onward. It also says December year-on-year inflation should fall by half a percentage point per year, down from the 4.0% target planned for December 2005.
That means an inflation goal of 3.5% for end-2006.
On Tuesday a Hungarian central banker said the bank was unwilling to allow a depreciation of the forint to create upward pressure on inflation.
Deputy NBH Governor Péter Adamecz said that although the government would accept higher inflation as a consequence of a lower prime rate and a weaker currency, it (higher CPI) “would not fit into [the central bank's] mandate."
