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NBH KNOCKS DOWN GDP FORECAST

 

The National Bank of Hungary (NBH) expects the economy to contract between 5.1% and 6.8% this year, forecasts from its latest quarterly Inflation Report show. The central bank had forecast GDP growth of between 0.3% and 2.0% in the previous report released late in June, a relatively optimistic projection that assumed a V-shaped rather than a swoosh-shaped recovery. The finance ministry expects GDP to fall by 5.1% this year. The NBH puts the average annual inflation rate for this year at between 3.5% and 3.6% in the fresh Inflation report, higher than the 3.2-3.3% range in the June report, but still within the +/- one-percentage-point tolerance band around the 3.0% mid-term inflation target. The central bank sees the economy bouncing back next year and forecasts GDP growth of between 4.4% and 6.8% for 2021 and in the 4.5-5.7% range for 2022. Its forecasts for inflation show CPI at 3.4-3.6% in 2021 and 3.0% in 2022.