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Nagy calls for maintaining voluntary rate cap on retail credit until June 30

Marton Nagy, the national economy minister, on Tuesday met Radovan Jelasity, chairman of the Hungarian Banking Association, to review macroeconomic and lending trends, his ministry said in a statement.

Nagy and Jelasity concluded that having pushed down inflation, the government had successfully restarted economic growth this year and had every chance of boosting it next year. Economic growth is expected to reach 2.5 percent this year before rising to 4.1 percent in 2025 on the back of rising investments, steady exports, growing labour-market activity and dynamic real wage growth, they said.

Lending trends, they said, had also taken a positive turn recently. The two officials reviewed a voluntary scheme under which lenders agreed to reduce their spreads on corporate credit over the benchmark three-month Budapest Interbank Offered Rate (BUBOR) to 0 percent from February 1 to May 1.

At the meeting Nagy asked that, in the interest of protecting families and boosting lending, banks maintain the voluntary 7.3 percent cap on home loan APRs in effect until June 30 in spite of the recent increase in yields.

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