According to the Hungarian Central Bank, it is in the interest of the national economy to achieve a sustained reduction in inflation this year. Hungary’s fundamental strategic goal is to continue the economic process to reach the same standard, stage, or level that we had before. Additional goal is to restart a sustainable economic process – asserted MNB on Tuesday.
The Central Bank had responded decisively to current inflationary trends by becoming the first in the European Union to launch an interest rate hike cycle in June 2021, and by implementing the most determined monetary tightening in the continent, addressed the severe financial market turbulence caused by geopolitical tensions with targeted intervention.
The gradual tightening of the MNB’s monetary policy has played a key role in bringing domestic inflation down to the 4th-highest rate in the EU so far in 2023, and returning to single-digit inflation by the end of this year,”
the MNB statement said.
They explained that “a growing number of central banks in more developed market countries are focusing on price stability because there is a broad historical lesson that high inflation is the number one obstacle to stable economic growth. Inflation reduces real incomes, lowers consumption and investment, thereby dampening output and economic growth and erode fiscal revenues. This is also the case in Hungary today,” they noted.
Inflation should continue to be reduced until price stability is achieved, as the current rate of inflation, despite a significant reduction, is still unacceptably high and damaging to the economy. Lasting economic growth and stability can only be achieved if inflation is kept under control in the long term, and the MNB will continue to take decisions with this objective in mind, the Central Bank said.
Via www.mnb.hu, Featured image: MNB/ Facebook.