Inflation index looks to rise to 3.8% in fourth quarter

27 Jun 2019

The National Bank of Hungary confirmed that its inflation is expected to rise to 3.8% during the fourth quarter and see a decline closer to the end of the year 2019. The central bank did not change any of its interest rates last Tuesday. 

The economy was said to be in an altering phase with high wage and output growth, but also capable to keep up with the growing aggregate demand, by Deputy Governor Marton Nagy.  

On Thursday, the NBC reported that ‘Core inflation excluding indirect tax effects is expected to rise slightly in the months ahead.’ It went on to add that despite ‘the external disinflationary effects - stemming mainly from the economic slowdown in the euro area - it will gradually fall to 3% from the end of the year.’ 

The rate is expected to decline next year, being predicted to drop to 3.5% next year and 3.1% in 2021. Furthermore, private sector gross wage growth will drop from 10.9% to 9.6% next year and to 8.9% in 2021. 

Inflation is not expected to have a second-round impact and the data is to be checked every three months, with the next report being released in September.