The Hungarian central bank is likely to keep its base rate of 13%, the highest in the European Union, unchanged next Tuesday, as inflation is expected to soar to 18.7% next year, an increase of more than 4% compared to 2022 levels.
In a survey conducted from December 12-16, all 17 experts predicted that the National Bank of Hungary (NBH), which introduced a new fast deposit instrument with an 18% interest rate in mid-October to support the forint, would maintain its base rate the following week.
The National Bank of Hungary (NBH) will also release updated economic projections on Tuesday. According to Governor Gyorgy Matolcsy, these projections indicate that inflation will range between 15% and 18% next year. read further
Since then, inflationary pressures have increased as a result of Prime Minister Viktor Orban’s decision, under supply shortage pressure, to remove a one-year restriction on retail fuel prices. read further
According to economists surveyed by Reuters, the average inflation rate in 2023 will be 18.7%, 410 basis points more than this year. Based on the European Commission’s most recent economic estimates, this inflation rate would be by far the highest in the EU.
After an estimated 5% expansion in 2022, economic growth is anticipated to come to a halt in 2023, followed by a 2.5% rebound the following year.