Vice governor Virág expects inflation close to 20% by year end

HUNGARY - In Brief 11 Aug 2022 by Istvan Racz
MNB vice governor Barnabás Virág spoke on the radio yesterday. He was asked about inflation prospects. Although he gave a view that was quite a lot different from the Bank's Q2 inflation forecast of late June, he pretty much just confirmed the obvious, by saying that the headline CPI-inflation rate is likely to move up to close to 20% by December. He mentioned two new factors: the impact of the recent government measures to reduce the scope of administrative price controls on energy (gas, electricity and motor fuels), and the impact on food prices of this year's exceptionally bad drought, which now looks even worse than previously expected - actually the worst on record in Hungary. Mr. Virág said that inflation could just peak around the 20% level at year end or in early 2023, though he warned that we are still quite far away from having a clear view of the peak for the current inflation cycle. This forecast is exactly the same as the one we have been reporting about since the latest government measures on energy prices became known. 

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