Hungarian central bank rate-setters raised the base rate – Feb 22, 2022
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Hungarian central bank rate-setters raised the base rate by 50 basis points to 3.40 percent at a regular policy meeting on Tuesday.
The Monetary Council also expanded the interest rate corridor by the same extent.
In a statement released after the meeting, the Council said “the risks to the outlook for inflation have increased and continue to be on the upside”, while “persistently high” commodity, crop, food and energy prices and elevated international freight costs “continue to point to sustained external inflationary pressures”. The tight labour market, coupled with accelerating wage growth and a higher inflation environment, “may lead to a further rise in inflation expectations and an increase in second-round inflation risks”, it added.
Headline inflation “will begin to decline later than previously expected” while core inflation “may pick up further in the coming months”, the Council said.
The policymakers said companies are repricing goods and services “at relatively short notice” amid strong domestic demand, as well as higher commodity prices and wage costs.
“The degree to which repricings take place in the coming months will determine the yearly dynamics of both inflation and core inflation,” they added.
The Council said inflation risks warrant a further tightening of monetary conditions, adding that they deem it “necessary to continue the base rate tightening cycle on a monthly basis while gradually raising it to the level of the one-week deposit rate”.
Prevalent indicators – as the subject of this article centers on – continual to exhibit that the Hungarian Economy is in TROUBLE.
All core indicators used to access the performance of a country’s – Economic & Financial current and Future position continue to TREND in direction, that give CLEAR identification and indication – that the Hungary Economy is in TROUBLE.