Research Detail
| 10.03.2022 / Erste Group Research |
Economy to slow after recovery, amid rising inflation pressure The outbreak of the Russian-Ukrainian war has created additional uncertainties, posing lower risks to GDP growth and higher risks to inflation. Last year's outstanding economic growth figures, coupled with a loose fiscal policy, create strong momentum for the beginning of this year. However, a longer-lasting war increases the likelihood of downside risks materializing. Due to the increased uncertainties and possible negative consequences of the war, we expect this year's GDP growth to decline below 5%. The mid-term outlook has also worsened - growth figures are set to be slower than 4% annually in the medium-term horizon. The MNB has been continuing its long battle against surging inflation. The monetary policy toolkit has remained rather complex. In the current setup, the rate of the one-week deposit facility determines effective rates. Upside risks to inflation and the vulnerability of the domestic currency imply further monetary tightening. We expect the policy rate and one-week depo rate to converge above 7%, probably in the first half of the year. As a result of the war, the forint hit a new historical nadir at 400 in early March. We believe that further rate hikes should help the stabilization of the forint at stronger levels against the euro. |
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Allgemeine Informationen
| Autor | Erste Group Research |
| Datum | 10.03.2022 |
| Sprache |  |
| Produktname | CEE Country Macro Outlook |
| Thema im Fokus | Makro und Zinsen, Währungen |
| Volkswirtschaft im Fokus | Ungarn |
| Währung im Fokus | Ungarischer Forint |
| Sektor im Fokus | - |
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