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NBH Say "Careful" Approach to Monetary Policy Still Warranted

HUNGARY

Highlights from the December policy statement:

  • Risks surrounding global disinflation and volatility in international investor sentiment warrant a careful approach to monetary policy.
  • Hungary’s economy is clearly on a path of disinflation, while risk perceptions have improved further.
  • As a result of the negotiations on the EU funds, the drawdown of Cohesion Funds for the period between 2021 and 2027 may start. The agreement will improve Hungary’s risk perception and net lending. In addition, incoming funds will have a favourable effect on the government debt path.
  • Annual inflation may be between 17.6 and 17.7 percent in 2023, between 4.0 and 5.5 percent in 2024 and between 2.5 and 3.5 percent in 2025 and 2026.
  • Economic performance may be in the range of (-0.6)–(-0.4) percent in 2023. Economic performance is projected to increase by 2.5–3.5 percent in 2024, by 3.5–4.5 percent in 2025, and by 3.0–4.0 percent in 2026.

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