Hungary PMI likely to continue showing strong outturns for December

The Hungary's MNB kept its policy rates on hold as expected by market consensus at 1.35%. While the CPI inflation is still far below the 3% target, it recently turned positive with an outturn of 0.5% to November.

The production growth in October was 12.7% year on year, which is 4% above the consensus expectations and the largest October forecast surprise in fourteen years.

"In line with this performance, we expect the PMI to continue showing strong outturns for December. This pick-up in real activity, together with rising CPI inflation, is likely to lead the MNB to keep its policy rate at 1.35 in the near term", says Barclays in a research note.