Economy
Morgan Stanley warns Hungary inflation could be more than 4% in 2019
The comprehensive study on emerging markets, published on Friday, found that in the CEE region, oil prices filter through to inflation most in Hungary and Romania. This is partly because the weight of fuel in the CPI basket is higher in these two countries (7.7% and 5.9%, respectively) than in Poland (4.4%) and the Czech Republic (3.5%).
According to Morgan Stanley's forecast model, every 10% increase in oil prices could add 80 bps to the annual inflation rate in Hungary, considering both direct and indirect effects on prices. As a result, twelve-month inflation will likely rise to morte than 4! for a short time in 2019.
Inflation rose to 3.6%, a 5.5-year high, in August.
In contrast, the National Bank of Hungary (MNB) projects lower inflation: the central bank expects CPI to rise no more than 4%, the top of its tolerance band, and to remain stable at 3% from the second half of 2018, in line with the long-term target.
According to Morgan Stanley's forecast model, every 10% increase in oil prices could add 80 bps to the annual inflation rate in Hungary, considering both direct and indirect effects on prices. As a result, twelve-month inflation will likely rise to morte than 4! for a short time in 2019.
Inflation rose to 3.6%, a 5.5-year high, in August.
In contrast, the National Bank of Hungary (MNB) projects lower inflation: the central bank expects CPI to rise no more than 4%, the top of its tolerance band, and to remain stable at 3% from the second half of 2018, in line with the long-term target.
