Janos Cinkotai and Gyorgy Kocziszky voted for a quarter-point cut in the base rate at the monetary council’s July 24 meeting, while the five other members voted to keep the rate at 7.0%, according to minutes released last week. The majority view was that inflation will remain above the 3% target in 2012 and 2013 due to higher VAT and excise taxes. Inflation is not likely to fall to 3% until 2014, they argued.

The council expects modest GDP growth next year after a decline this year.

The council recommends that the government sign an agreement with the IMF and the EU as soon as possible in order to reduce the risks in financing the budget deficit.

The monetary council’s next rate-setting meeting is set for August 28.