BUDAPEST (Reuters) – Hungarian gross home product progress can be “very near zero” within the third quarter, considerably under market expectations, Economic system Minister Marton Nagy stated on Thursday.
In energy since 2010, Prime Minister Viktor Orban has struggled to revive Hungary’s economic system after final 12 months’s downturn following a surge in inflation to greater than 25% within the first quarter of 2023, the very best stage within the European Union.
Economists polled by Reuters count on third-quarter progress at an annual 1.3%.
“Our inside progress is safe,” Nagy advised a enterprise convention. “However exterior progress doesn’t rely upon us.”
“In an economic system the place the share of exports is value 80% of GDP and publicity to the German economic system is so sturdy, it is a tough subject,” he stated.
Nagy reiterated his view that Hungary has overcome the inflation disaster, with the most recent information coming in under expectations. September inflation fell to the Hungarian central financial institution’s 3% goal for the primary time since 2021.
“Inflation just isn’t a difficulty. Precise information have been coming in under expectations repeatedly. That is the results of lingering considerations over inflation. The central financial institution additionally seems to be caught in inflation considerations,” he stated.
Nagy’s remarks, nonetheless, seemed to be at odds with the central financial institution’s evaluation, which has struck a cautious tone concerning additional cuts from the EU’s highest, 6.5% benchmark price stage on account of monetary market dangers.
Deputy Governor Barnabas Virag has flagged a possible pause within the financial institution’s rate of interest cuts subsequent Tuesday after an escalation of the battle within the Center East and a shift within the U.S. price outlook pushed the forint to 18-month-lows.
