IMF warns Hungary central bank should watch inflation pick-up

BUDAPEST: Hungary's central bank could keep its policy loose in the short term but should be ready to act if inflation pressures build up, the International Monetary Fund said on Thursday.

"It will be important to monitor the situation and be ready to remove some of the (past) stimulus as underlying inflationary pressure picks up," the Fund said in a statement to conclude a Budapest visit of a staff team in the past two weeks.

They also said a rise in the budget deficit this year could provide a boost to the economy, but also means that monetary policy may have to reverse easing at a faster pace.