Hungary: Sharp correction due in 2020 – Standard Chartered

Economists at Standard Chartered Bank expect a sharp slowdown in 2020 as the coronavirus takes its toll on the Hungarian economy. EUR/HUF is trading at 359.416.

Key quotes

“We now forecast growth of -1.4% in 2020 (3.0% previously), 2.2% in 2021 (2.7% previously) and 2.7% in 2022 (no change).”

“We expect the National Bank of Hungary (NBH) to cut its policy rate by 15bps to 0.75% by end-2020 (previously 0.90%), and while there is still scope for normalisation in 2021, we see the base rate rising back to just 0.9% by end-2021 and 1.3% by end-2022.”

“We lower our annual average inflation forecast to 2.5% in 2020 (3.0% previously), before rising back to 3.5% in 2021 (previously 3.0%).”