Research Detail
| 2024/09/13 / Erste Group Research |
Boosting growth remains a challenge The sharp decline in investments significantly restrained growth in 1H this year, while household consumption was somewhat stronger than anticipated. Weak external conditions and an uncertain outlook for Germany resulted in the industrial sector's underperformance, operating below capacity. Looking forward, the upcoming year may present more favorable conditions; however, the use of new export capacities will remain heavily reliant on the state of the European economy. CPI is set to stabilize below 4% in the short term but will likely increase above the upper end of the tolerance range by the year-end. Cautiousness and patience remained the key words for the monetary policy. Although inflation is to rise less in 2H than predicted earlier, the development of core inflation could be a concern for the MNB. Furthermore, increased forint volatility necessitates caution, as well. The policy rate was left unchanged at 6.75% in August, with limited potential for relevant monetary easing this year. In parallel with rate decisions of major central banks, we expect the MNB to deliver two more cuts in the remainder of the year and hence the policy rate is to stand at 6.25% at the year-end. |
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General information
| Author | Erste Group Research |
| Date | 2024/09/13 |
| Language |  |
| Product name | CEE Country Macro Outlook |
| Topic in focus | FX, Macro/ Fixed income |
| Economy in focus | Hungary |
| Currency in focus | Hungarian Forint |
| Sector in focus | - |
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