Hungary’s central bank left its base rate at 5.50 per cent and kept the overnight deposit and lending rates unchanged. September inflation was 1.6 per cent, but the bank expects fuel prices and tobacco excise changes to lift inflation ahead. It retained a cautious approach as high energy prices and rising global bond yields complicate the outlook.
September annual consumer inflation was 1.6 per cent and core inflation 1.9 per cent. Fuel-price inflation increased while food prices continued to fall. Hungary’s central bank expects fuel prices and tobacco excise changes to increase inflation during the remainder of this year and in 2027. Its average inflation forecasts are 1.8 per cent for this year and 3.1 per cent for 2027.[1]
The inflation target changes to 2.5 per cent on January 1, 2028. The council considers positive real interest rates and stable financial markets, particularly foreign exchange, important for anchoring expectations. It also highlighted high global oil and gas prices, rising long-term bond yields and a stronger dollar.[1]
In Hungary, strong real-wage growth accompanies slowing nominal wage increases. Industrial output expanded in August while retail-sales growth slowed. Severe drought is reducing agricultural output and weighing on growth, partly offset by stronger industrial exports. The bank said subsequent decisions would remain cautious and data-dependent, reflecting inflation prospects, global developments and Hungary’s risk premium.[1]
