At its meeting on February 22, the Monetary Council reviewed the latest economic and financial developments and voted to reduce the central bank base rate by 25 basis points from 6.00 pct to 5.75 pct, with effect from February 23, 2010.
In the Council’s judgment, Hungarian growth is likely to resume in the middle of 2010 as the economy recovers from the sharp downturn of 2009. Inflation is expected to remain elevated temporarily due to the increases in taxes and administered prices, and then to fall significantly in the second half of the year, before dipping below the Bank’s 3 pct target in 2011. There remains considerable uncertainty about future conditions in global financial markets.
The Council revised its GDP and CPI forecast, it expects that the GDP-fall will be 0.2 pct in 2010, the CPI 4,4 pct, the GDP will rise 3,4 pct in 2011, the CPI will 2,3 be pct next year.
