Hungary central bank yanks inflation forecasts much higher, cuts growth projections
The MNB is set to release its quarterly Report on Inflation on Thursday, with a detailed assessment of and outlook on the Hungarian economy. As usual, the bank has published its key inflation and growth estimates beforehand today.
MNB Governor György Matolcsy ’spoiled the fun’ two weeks ago when he revealed at a parliamentary hearing that the bank projects annual average inflation to be between 4.7 and 5.1% in 2022. Three months ago, the range was still between 3.4 and 3.8%, so the upward revision is extremely sharp, indicating how dramatically the inflation scene deteriorated in the fourth quarter.
Changes have been made to the GDP growth forecasts, as well. Instead of 6.5 to 7.0% projected in September, the bank now expects 6.3 to 6.5% annual average growth for this year. Details of this downward revision will be revealed on Thursday.
What’s certain is that the updated prognosis has to do with the weaker-than-expected Q3 GDP print, as well as the worsened growth outlook for Q4. We should note that even the new forecast is rather low; the central bank does not seem to be very optimistic about the end-year economic performance.
As you can see, the 2022 growth estimates have also been trimmed by a full percentage point, while the 2023 estimate was upped by 0.5 ppt.
Cover photo: Getty Images
