The building of the NBH in Budapest – Photo: wikimedia

NBH: CPI growth expected to be temporary

Hungary's inflation rise is expected to be temporary, with annual inflation coming to 3.8-3.9 percent in 2021, Andras Balatoni, the director of the central bank, told an online press conference on Thursday.

In its December forecast, the National Bank of Hungary (NBH) had put average annual inflation for this year at 3.5-3.6 percent, Balatoni noted.

After spikes in the short term, inflation is expected to normalise around the 3.0 percent target, he added.

The Hungarian economy is likely to rebound quickly from the slump caused by the economic effects of the coronavirus pandemic, with GDP likely to reach 2019 levels by the end of the year, he said. Growth is expected to be between 4-6 percent in 2021 and 5-6 percent in 2022, Balatoni said.

The NBH’s quarterly Inflation Report said that in the short term, higher vehicle fuel prices, a rise in the excise tax on tobacco products and repricing are expected to lift CPI temporarily to 4.8-4.9 percent in the second quarter.

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