Summary Hungary's economy grew just 0.1 percent in the second quarter after 0.6 percent in the first.
BUDAPEST (AFP) - Hungary s central bank cut Tuesday its main interest rate by 20 basis points to 3.60 percent, the 14th monthly lowering of borrowing costs in a row.
Inflation in European Union member Hungary fell in August to a 39-year low of 1.3 percent, while the economy remains weak despite emerging from recession in the first quarter.
The central bank lowered the rate by 25 basis points 12 times before reducing the size of the cut to 20 percent in August, with governor Gyorgy Matolcsy indicating this might slow to 10 basis points and that the end of the easing cycle was in sight.
Hungary s economy grew just 0.1 percent in the second quarter after 0.6 percent in the first, when Hungary exited recession with growth outperforming many other eastern and central European economies.
Hungary s gross domestic product (GDP) fell by 1.7 percent overall in 2012, down from 1.3 and 1.6 percent increases in 2010 and 2011 respectively.
The government of Prime Minister Viktor Orban forecasts annual growth of 0.7 percent in 2013 although the European Commission forecasts just 0.2 percent growth.
Brussels earlier this year removed Hungary from the so-called excessive deficit procedure, where it has been since joining the EU in 2004, in recognition of its efforts to fix its public finances.
Unemployment is above 10 percent, however, direct foreign investment is weak, Hungarian government bonds are rated "junk" by the main agencies and bank lending remains weak.
Orban meanwhile has spooked foreign investors by special taxes on certain sectors such as telecoms, and last week said the government was looking to renationalise utility firms.
