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The National Bank of Hungary (NBH) said in a preliminary release of the main forecasts from its quarterly Inflation Report due on Thursday that inflation in 2020 could be higher than its earlier forecasts. The central bank raised its forecasts for inflation for this year to 3.2-3.3% compared with the previous estimate of 2.6-2.8% in its earlier Inflation Report published in the spring. The inflation forecast for 2021 was lowered to 3.2-3.3% from the earlier estimate of 3.4-3.5%. For 2022 the NBH expects inflation to slow to 3.0%, in line with its previous estimate given in March. The NBH explained that the forecast is in a range because of the significant degree of uncertainty surrounding the economy’s performance due to the novel coronavirus pandemic, and the situation on the ground could change day by day.
The central bank lowered its forecast for economic growth for this year significantly. The NBH expects GDP to keep growing but by only 0.3 to 2.0% compared with an earlier estimate of 2.0 to 3.0%. Economic growth in 2021 could be between 3.8% to 5.1% instead of the 4.0% to 4.8% range predicted earlier. In 2022 economic growth is seen to be around 3.5% to 3.7% compared with the earlier 3.5% estimate.