Look for:

Our offer for

Research Detail

2021/06/10 / Erste Group Research

Monetary policy to become tighter amid economic rebound


Annual GDP growth could reach as high as 7% this year and is set to slow to around 4% in 2022. Industrial exports will remain an important growth driver, while domestic consumption should also improve, as the economy gradually reopens. The expansive fiscal policy, coupled with the EU Recovery Funds, implies an investment-based recovery in the medium term. Meanwhile, inflation is on an upswing and the annual average inflation rate will exceed 4% this year. Apart from many one-off price-increasing effects characterizing the year, the danger that permanent second-round inflation effects will also intensify has increased.

The fast economic rebound, coupled with rising inflation, has made the central bank change its loose monetary policy stance. Monetary policy decision makers promised to embark on a monetary tightening cycle, with the first effective step to be carried out at the June rate setting meeting. Meanwhile, the bond buying program of the MNB should continue for the time being and the phasing-out of the QE will be gradual. As a result of the promised monetary tightening, the forint strengthened below 350 against the euro within a relatively short period of time. We expect the EURHUF to stabilize within a lower range in the coming period.


PDF Download Download PDF (139kB)

General information

AuthorErste Group Research
Date2021/06/10
Languageen
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Economy in focusHungary
Currency in focusHungarian Forint
Sector in focus-
Download



Decline
Accept

We use cookies and web analysis software to give you the best possible experience on our website. If you consent, these tools will be used. For more details please read our Data protection policy.

INFORMATION FOR PRIVATE CLIENTS / CONSUMERS

Any information, material and services regarding financial instruments and securities provided by Česká spořitelna/Erste Group/ or any of its affiliates (collectively “Erste Group“) on this and any linked website hereafter (jointly the “Websites“) shall be exclusively to investors who are not subject to any legal sale or purchase restrictions.

By agreeing to this hereto, the visitor entering this Websites confirms that has read, understood and accepted this Information and the Disclaimer