NBH See Strong Domestic Demand Countering War Impact on Growth

The Hungarian central bank release their post-decision policy statement.

Highlights:

• The war has raised inflation through higher commodity and energy prices, which has been aggravated by ongoing supply disruptions.
• Despite the war situation, Hungarian economic growth continued to be strong, to which nearly all sectors of the national economy contributed.
• Strong domestic demand may partly offset the adverse effects of the Russia-Ukraine war on growth.
• External, cost-side effects continue to quickly feed through to consumer prices, and as a result they have been a major factor driving short-term inflation developments.
• The inflation rate is expected to decline gradually from the autumn months.
• The Monetary Council will continue the cycle of interest rate hikes until the outlook for inflation stabilises around the central bank target and inflation risks become evenly balanced on the horizon of monetary policy.