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Central bank lifts inflation forecast for 2021, lowers GDP growth estimate

The National Bank of Hungary raised its forecast for inflation for this year to 5.1 percent and lowered its projection for economic growth to 6.3-6.5 percent in a preliminary release of the main forecasts from its quarterly Inflation Report.

In its September report, the central bank had put inflation for this year at 4.6-4.7 percent and GDP growth in the 6.5-7.0 percent range.

The NBH raised its inflation forecast for 2022 to 4.7-5.1 percent from its September estimate of 3.4-3.8 percent. It sees CPI falling to 2.5-3.5 percent in 2023 and 2024 compared with the previous estimate of 2.8-3.2 percent.

The central bank also lowered its GDP growth forecast for next year to 4.0-5.0 percent from the September estimate of 5.0-6.0 percent. It put economic growth at 3.5-4.5 percent for 2023 and at 3.0-4.0 percent for 2024. In September, the NBH put the 2023 growth rate between in the 3.0-4.0 percent range.

The bank said the fourth wave of the coronavirus pandemic and the emergence of new virus variants had increased the risks surrounding Hungary’s economic recovery, noting its decision to prepare forecast ranges.

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