Budapest, September 24 (MTI) – The National Bank of Hungary (NBH) reduced its projections for core inflation, which excludes volatile fuel and food prices, in a quarterly Inflation Report published on Thursday, but it still sees an acceleration in prices next year.
The NBH cut its projection for 2015 core inflation to 1.4 percent from 1.5 percent in the previous report published in June. It reduced the forecast for 2016 to 2.5 percent from 2.8 percent.
Core inflation is likely to pick up gradually as costs increase continuingly and slowly from low levels and as a result of an expansion in domestic demand and rises in wages, the NBH said in the report.
The NBH cut its forecast for core inflation excluding the indirect effect of taxes to 1.2 percent from 1.3 percent for 2015, and to 2.2 percent from 2.4 percent for 2016.
Core inflation excluding indirect taxes will gradually rise from its currently low value due to a slight increase in costs as well as recovering demand and improving labour market developments, the central bank said.
The NBH said on Tuesday already that it had lowered its headline inflation forecast for 2015 to 0.0 percent from 0.3 percent in the fresh report. The projection for 2016 CPI was lowered to 1.9 percent from 2.4 percent.
The NBH also lowered its forecast for GDP growth this year by 0.1 percentage point to 3.2 percent. It left the projection for 2016 GDP growth unchanged at 2.5 percent.
Photo: Daily News Hungary