Ahead of today's NBH rate decision,.........>

HUNGARY: Ahead of today's NBH rate decision, analysts at TDS are in line with

the unanimous consensus and expect all rates to remain unchanged. They add "In

particular we expect the policy rate to be kept at 0.9% and the O/N Deposit Rate

to be kept at -0.15%. The language in the statement is likely to maintain a

dovish bias. Over the medium term inflation is expected by the NBH to be driven

higher by buoyant domestic demand, wage hikes, and higher commodity prices.

However, this will be partially offset by moderate external inflation, low

inflation expectations, as well as reductions in employers' social

contributions, and VAT rate cuts announced for this year.""Consequently the rise

in inflation is expected by the NBH to be slow and the 3% inflation target will

be achieved sustainably only by the middle of 2019. However, given the strong

economy and rapid wage growth we think the risks are skewed towards inflation

rising faster than the NBH forecasts."