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GS See 6.5-7.0% Rates at End-June as Realistic

HUNGARY
  • Goldman Sachs expect weak inflation momentum in Hungary, and expect headline inflation to decline next month, then increase closer to the upper bound of the MNB's target range in May due to base effects, before resuming its decline.
  • Their inflation forecasts are more dovish than both consensus and the MNB, which expects headline inflation to increase above the target range. GS think this will enable the MNB to continue its cutting cycle.
  • They see the policy rate reaching 6.5-7.0% by the end of Q2 as realistic, but any easing beyond this will be more data-dependent. They expect further rate cuts to be delivered in H2.

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