The annual inflation rate could realistically remain below 2 percent, in line with the target set by the Hungarian National Bank (MNB) in June, the central bank’s deputy governor said in the latest episode of the MNB Podcast.
According to a statement sent by the MNB to the Hungarian News Agency (MTI) on Sunday, Péter Benő Banai stressed that, alongside achieving and maintaining price stability, the central bank’s primary objective is to act as a constructive partner in meeting the conditions for Hungary to join the eurozone.
Hungary’s inflation target may be due for a review
Banai recalled that Hungary’s current 3 percent inflation target is higher than the inflation targets of several other European countries and also exceeds the 2.7 percent inflation reference value included in the European Central Bank’s latest convergence report.
In light of the government’s intention to adopt the euro, he said it could therefore be appropriate to review Hungary’s inflation target. The deputy governor stressed that achieving and maintaining price stability is also of primary importance for sustainable economic growth.
Discussing euro adoption, Banai said that meeting the necessary economic conditions – including sound public finances, a declining debt-to-GDP ratio, low inflation, low yields on long-term government bonds and exchange-rate stability – would be beneficial for the Hungarian economy as a whole.
Euro adoption brings both benefits and risks
Banai added that adopting the euro has both advantages and potential disadvantages. Membership of the eurozone, he said, would not in itself lead to faster economic convergence. In the longer term, the pace of Hungary’s economic catch-up would instead depend on the quality of economic policy, he said.
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MNB: Bank fraud down by 41% in some categories
Speaking about efforts to combat cyber fraud, Banai highlighted the results of the central bank’s “five strikes” programme, launched last summer. Thanks in part to the initiative, the number of fraudulent transactions involving bank transfers fell by 41 percent in some categories, while in many cases the programme also succeeded in reversing previously rising trends in fraud.
Qvik offers cheaper alternative to card payments
Regarding the Qvik instant payment system, Banai said the development was not only a convenient alternative to bank cards, but also offered a cheaper payment solution for the national economy. The full episode is available on the MNB’s YouTube channel, according to the statement.
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