London’s financial analysts said that this year’s “very strong” growth momentum was started by EU economies in Central and Eastern Europe, with a current annual growth rate of close to 6%.
One of the largest London-based global financial and economic analysts in Capital Economics’s Tuesday study, said that the average aggregate economic mood index (ESI) calculated by GDP weighted by GDP was 109.9 in January after 107.8 in December.
Within the region, Hungary’s ESI index was the highest this month with 120.9 points.
The January weighted ESI averaged for the region as a whole is nearly ten years behind the house: the region index measured by the company has not been so high since March 2008.
Capital Economics calculates its own regional mood indicator for Hungary, the Czech Republic, Slovakia, Poland, Croatia, Romania, Bulgaria and the Baltic Republics, as derived from the data of the European Commission.
Based on the regional ESI model they use, London’s analysts suggest that the annual growth rate of the total domestic product (GDP) of the EU economies in Central and Eastern Europe may range from 5.5 to 5.8 percent.
Capital Economics expects growth in the region’s EU economies to remain strong in the first half of 2018, however, due to accelerating inflation and rising interest rates, the momentum is likely to slow down in the second half of the year.
In Hungary, however, almost unanimous opinion of the London analyst community suggests that monetary tightening is not expected in the foreseeable future.
The latest study by emerging markets analysts in London’s investment department, Commerzbank, states that the core inflation accelerated somewhat in Hungary over the recent period, and this year’s additional minimum wage increase is another driving force.
However, according to the house, it is difficult to imagine that in the current global environment characterized by low inflation, Hungarian inflation would exceed the central target of 3 percent of the National Bank of Hungary (MNB).
According to the London economists of the company, the MNB’s base position is so mild that it is unlikely that monetary policy will be reversed until the inflation rate in Hungary exceeds the 4 percent ceiling of the central bank’s tolerance band.
On the basis of this, Commerzbank considers it unlikely that the MNB will raise its base rate by the end of 2019.
The Morgan Stanley Global Banking Group’s London Investments Department’s emerging markets analysts predicted a projection of 2.7 per cent of their overall projections over the broader consensus in the Hungarian economy this year.
London analysts of this company also thought that the monetary policy of the MNB would not change even if annual inflation reached this year’s central target level of 3 percent.
Morgan Stanley’s long-term forecast, like Commerzbank, is that the MNB’s core interest rate will remain at 0.90 percent in the fourth quarter of 2019.
Source: MTI / Picture: kadarka.net /