NBH Council Expect Strong Disinflation to Continue in Q1, Slow Thereafter

Highlights from the minutes of the December NBH meeting:

• “Decision makers discussed alternatives of reducing the base rate by 75 or 100 basis points”
• “There was a consensus among the decision makers that in the coming months, decisions on any further reductions in the base rate and their optimal pace would be made on the basis of this information, in a data-driven manner”
• “In the Council’s unanimous view, strong disinflation was expected to continue in 2024 Q1, before slowing down, and thus the consumer price index was likely to return to the central bank inflation target persistently in 2025.”
• On EU funds: “The agreement would improve Hungary’s risk perception and net lending. In addition, incoming funds would have a favourable effect on the government debt path”
• “Both economic growth and inflation might be lower compared to the baseline in the scenarios that assume deceleration in global economic activity and a slower recovery in consumption. However, possible capital outflows from emerging markets were consistent with a higher inflation path”

Click here to see the full release.