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Orban Comments Signal Growing NBH/Government Rift

HUNGARY
  • The government had to “take over” from the central bank to slow price growth by setting a goal of taking inflation down to to below 10% by the end of the year, Prime Minister Orban said in a speech to lawmakers as per Bloomberg.
  • NBH Governor Matolcsy, who has predicted inflation dropping to about 7% in December, last week rebuked Orban’s cabinet for fanning price-growth with pre-election spending, a regime of price caps on basic staples that he said ended up raising inflation, as well as a failure to rein in a record budget shortfall this year.
  • The government, in turn, has said the central bank was ultimately responsible for inflation, even as it has argued for a higher inflation goal than the 3% target.

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