The Magyar Nemzeti Bank (MNB, the central bank of hungary) is expecting an economic downturn of 5.1 - 6.8 percent and inflation of 3.5 - 3.6 percent this year, according to the main figures in the latest Inflation Report released.
Next year, GDP may grow by 4.4 - 6.8 percent, inflation may hardly change, slowing to the range of 3.4 - 3.6 percent.
In 2022, according to the central bank forecast economic growth and inflation are likely to be 4.5 - 5.7 percent and 3.0 percent, respectively.
MNB noted that due to the coronavirus epidemic there is still substantial uncertainty regarding the economic outlook; conditions keep changing day by day, therefore itsforecasts are provided within a range.
In its previous Inflation Report in June, MNB forecast 0.3 – 2.0 percent GDP growth, with inflation at 3.2 - 3.3 percent. At that time, growth was estimated at 3.8 - 5.1 percent in 2021 and 3.5 - 3.7 percent in 2022.
MNB: the 0.60 percent base rate supports price stability
The 0.60 percent base rate sustainably supports price stability, the preservation of financial stability and the restoration of economic growth, the MNB Monetary Council writes in its explanatory statement published on Tuesday, after leaving both the base rate and the interest rate corridor unchanged.
The Monetary Council is committed to maintaining price stability during the coronavirus epidemic, and will pay particular attention to the inflationary impacts as the economy recovers. They add that they are ready to use the right tools if a lasting change in the inflation outlook justifies it.
According to the Council, macroeconomic and money market developments continue to be driven mainly by the effects of the coronavirus epidemic. Hungary's economic performance may reach pre-epidemic levels at the turn of 2022, while inflation is likely to gradually moderate by the end of the year, the report says.