In Hungary, dovish comments from the central bank (MNB) deputy governor this week and recent softer-than-expected inflation data have prompted us to pencil in a larger 100bp interest rate cut at the next meeting later this month and revise down our end-2024 interest rate forecast from 7.00% to 6.00% (vs. 10.75% currently). Elsewhere, inflation data out of Israel for December also surprised to the downside once again, and 2% inflation is now within reach. Loose fiscal policy due to the war continues to pose a risk but we don't think this will stand in the way of further interest rate cuts.
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