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March 30, 2018 www.intellinews.com I Page 9
Hungarian central bank hikes growth forecast as CEE boom continues
bne IntelliNews
Hungary’s central bank, the Magyar Nemzeti Bank (MNB) on March 27 raised its GDP forecast from 3.9% to 4.2% for 2018, while standing by its inflation forecast for the year.
Household consumption, boosted by double- digit wage growth and investments due to accelerating EU fund absorption is driving growth, while the external environment has remained supportive.
Economic growth is likely to decelerate in 2019 to 3.3%, revised up by 0.1pp as a result of a build-up in capacity constraints, slowing growth of real disposable income. For 2020, the MNB is expecting GDP growth to slow to 2.7%, in line with its earlier prediction.
The economy ministry is more bullish on growth projections, with a 4.3% forecast for this year, 3.8% for 2019 and 3.7% in 2020.
The government's annual average inflation forecast stands at 2.7% in 2018, 3% in 2019, and 3% in 2020, according to its December forecast.
Meanwhile, the central bank of neighbouring Slovakia lowered its 2018 growth forecast slightly from 4.3% to a still very healthy 4.2%. The Slovak Central Bank (NBS) forecast moreover that growth would accelerate to 4.7% in 2019.
“Compared to the previous forecast, there were only slight adjustments related to the lower prices of oil and food, and to stronger foreign demand,” NBS governor Jozef Makuch told a press conference on March 27.
The change in an outlook was due to a postponement of the carmaker Jaguar Land Rover’s new production in Slovakia. Also, the lower price of commodities, especially oil, influenced the prediction.