Hungary’s manufacturing output fell 1.1% m/m seasonally adjusted, while, it fell 2.4% y/y in March. The manufacturing data came in much below expectations. Consensus projection was for a growth of 2.5% y/y. The fall in manufacturing output was quite evident from a gradual decline in the regional PMIs in the past quarter, noted Commerzbank.

“We hold a 2.2% GDP growth forecast for this year vs. the MNB’s 2.8%”, added Commerzbank.

The manufacturing data for March raises the possibilities that the Hungarian central bank will lower its interest rates by more than what they are hinting at present. The central bank had hinted recently that they might stop easing when the rate is 0.9%; however, interest rate is expected to reach 0.75% by the end of 2016, according to Commerzbank.