Full Percentage Point Cut in Hungary’s Central Bank Base Rate
February 27, 2024
A reduction in the Central Bank of Hungary’s Base Rate from 10.0% to 9.0% bring its decline since October to 400 basis points. This cumulative decline is slightly less than the concurrent lessening of core consumer price inflation from 10.9% to 6.1% and two percentage points less than the slowdown in total CPI inflation from 9.9% to 3.8%. At 3.8%, inflation has moved marginally above the ceiling of the central bank’s medium-term target of 2-4%. Officials expect a near-term move higher in total inflation but project continuing disinflation in underlying core CPI. So far, only a third of the 12.4 percentage point rate increase between June 2021 and September 2022 has been reversed. From July 2020 until June 2021, the rate had stayed at a mere 0.60%. The precise path of future rate reduction is be data-driven as officials assess “incoming macroeconomic data, the outlook for inflation and developments in the risk environment.”
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central Bank of Hungary
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