A few specifics from the MNB press conference

HUNGARY - In Brief 26 Apr 2022 by Istvan Racz
A press conference indeed followed the Monetary Council's monthly rate-setting meeting of April 26. Governor Matolcsy and vice governor Virág spoke, and there was no room given to questions. Beyond generalities, a few specifics appear to be notable:1. Governor Matolcsy confirmed that the MNB is set to continue raising interest rates, given the coexistence of major disequilibria in three key areas: price stability, the fiscal balance and the current account balance. This sounds a more negative description than previously, when the three areas were not brought together in MNB speak, and with such a strong emphasis.2. The governor called for cooperation from the government, in fiscal policy and price regulation. This means a call for restoring fiscal equilibrium and, indirectly, to maintain administrative price controls. Mr. Matolcsy stressed that the MNB will not be able to restore price stability without this cooperation from the government.3. Mr. Virág said the MNB now expects 2022 average CPI-inflation (the headline rate) in the upper one-third of the 7.5-9.8% range predicted by them in late March. The Bank also expects that inflation will rise further to above 9% yoy in April.4. Mr. Virág also said the MNB expects this year's GDP growth in the upper half of the 2.5-4.5% range they set in the March inflation report. This is because of a strong showing in Q1, according to partial and preliminary information.We are pretty much convinced that administrative price controls will be maintained at least for the rest of this year, even though some of the administratively set fixed or capped prices may be reset at a higher level at some point. It is also our impression that si...

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