BUDAPEST, Jan 16 (Reuters) - Hungary's central bank is on a good path with monetary easing but is too cautious with rate cuts given the pace of decline in price growth, Economy Minister Marton Nagy told private broadcaster InfoRadio in an interview on Tuesday.
The National Bank of Hungary has slashed borrowing costs by a combined 725 basis points since May to 10.75%. But, faced with a sagging economy and a heavy 2024 election calendar, Prime Minister Viktor Orban's government has pressured the bank for even sharper cuts.
Data released last week showed Hungary's headline inflation easing to an annual 5.5% in December, half a percentage point below the median forecast in a Reuters survey and undershooting even the lowest estimate by 0.2 percentage points.
Nagy said he was curious about the bank's next move given the steep fall in inflation. The NBH will hold its next policy meeting on Jan. 30.
"The central bank is on a good path. It has started rate cuts, proceeding in 75 bps steps," Nagy said. "I still think that the central bank is being too cautious. They are being overly cautious about this whole thing."
Nagy said real interest rates were too high given the expected level of inflation at the end of 2024 - 4.95% based on the median forecast of economists in a Reuters poll last month.
"The question is whether we need to run such high real interest rates," Nagy said. "The direction is good, but the central bank could be a bit bolder." (Reporting by Gergely Szakacs; editing by Chris Reese and Mark Heinrich)
