Macroeconomic Forecast Hungary

Consumer price inflation in Hungary came in at 3.7% y-o-y in June, compared to 3.8% and 3.4% in May and April, respectively. The main driver behind the slight downtick in consumer price growth in June was a considerable easing in food and utility price inflation, which came in at 5.9% y-o-y and 8.0%, respectively, compared to 7.2% and 8.5% in May. Going forward, we maintain our core view that inflationary pressures will likely remain subdued in 2009 owing to the magnitude of aggregate demand destruction taking place throughout the economy, and forecast consumer price inflation coming in at 2.0%.

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