By Veronika Gulyas
BUDAPEST--Hungary's economic growth may slow further because of
the currency crisis in Russia, while the falling oil price will
weigh further on the country's inflation rate, the central bank
warned on Thursday
Hungary's economy relies more on exports to Russia than western
European countries, said Barnabas Virag, a central bank director.
He said growth in gross domestic product could slow by 0.1
percentage point with every 1.5 to two percentage point drop in
Russian GDP.
The sharp drop in global oil prices--from around $100 a barrel
to below $60 this year--has prompted the central bank to lower its
inflation forecasts for this year and next. In its December
inflation report, released Thursday, the National Bank of Hungary
said this year's inflation rate would fall to -0.2%, while next
year's would reach 0.9%.
The central bank forecast GDP growth of 3.3% this year and 2.3%
next year.
The projections are part of the central bank's baseline forecast
and doesn't include developments of the past week when the currency
crisis in Russia escalated, Mr. Virag said.
European Union sanctions already in place against Russia have
mostly affected Hungarian food exports there. Moreover,
pharmaceutical firm Richter Gedeon Nyrt. (RICHTER.BU) and OTP Bank
Nyrt. (OTP.BU) have been hit hard due to their large presence in
Russia.
Write to Veronika Gulyas at veronika.gulyas@wsj.com; Twitter:
@VeronikaGulyas1