The inflation target can be achieved in a sustainable manner at the current level of the base rate, according to the Monetary Council of the central bank.
The Monetary Council of the Magyar Nemzeti Bank (Hungary’s central bank), published a statement on the central bank’s website on Tuesday following the interest rate decision meeting. With its decision on Tuesday, the Monetary Council kept the base rate at 13.0 percent and did not change either side of the interest rate corridor. In the board’s assessment, the monetary easing effects in the coming months could lead to an inflation reversal, with second-round inflationary effects helped by tight monetary conditions.
They added that inflation is also clearly falling, albeit slowly, in other countries. In the region, like the MNB, the Czech, Polish, and Romanian central banks kept their benchmark interest rates unchanged.
GDP growth is also expected to turn around in the middle of the year, with initial subdued growth followed by a recovery in the second half of the year. The moderation in real incomes, rising corporate costs, the postponement of public investment, and a tighter interest rate environment are all dampening domestic demand.
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