Reduction of interest rates is expected

According to a forecast made jointly by GKI Gazdaságkutató Zrt. with Erste Bank, the relatively favourable rate of growth of the first quarter of the year will be maintained for the rest of the year. Reduction of real income will be less than 5 per cent by the end of the year. Inflation will not rise any further and will begin to fall in September. Exports grew by nearly 20 per cent in the first two months. Retail trade continued to expand modestly. Confidence in the Hungarian economy is growing, as budgetary process have been more favourable than expected. Co-operation between the government and the national bank is improving. The HUF is expected to stay strong.