"The rate of price increases may decline persistently to the tolerance band in early 2026 and reach the 3pc inflation target in early 2027," the NBH said in the quarterly Inflation Report.

Presenting the report, Andras Balatoni, an NBH director, said inflation had developed in line with the forecasts in the June report.

He acknowledged the impact of price restrictions on mitigating inflation, but said inflation pressure remained in product groups unaffected by the measures.

He added that mandatory markup caps, expected to remain in force until the end of November, had shaved 1.5pp off headline CPI.

He put CPI at 4.0pc-4.5pc for the rest of the year.

The fresh report forecasts average annual inflation of 4.6pc in 2025 and 3.8pc in 2026.

Balatoni said the NBH's GDP growth forecast for 2025 had been lowered by 0.2pp to 0.6pc on the impact of drought in the farm sector.

 He added that strong consumption dynamics would remain an important driver of growth over the entire forecast horizon, supported by both rising real wages and government measures.

From 2026, an improvement in exports and investments, a better outlook for Europe and easing uncertainty could support growth, he said.

Balatoni said investment volume was expected to fall 6.4pc in 2025, then increase 2.0pc in 2026 and 4.0pc in 2027.

Meanwhile, EBRD sees Hungary economy expanding 0.5pc in 2025, 2.0pc in 2026

The European Bank for Reconstruction and Development (EBRD) forecasts Hungary's GDP will grow by 0.5pc in 2025 and 2.0pc in 2026 in its latest Regional Economic Prospects report released.

The EBRD lowered the forecasts for 2025 and 2026 by 1.0pp and 0.7pp, respectively, from the previous report published in May.

The EBRD noted that GDP was broadly flat year on year in the first half of 2025 as weak industry and agriculture offset modest gains in household consumption and net exports remained a drag on overall growth.

Trade tensions are weighing on the automobile and batteries sectors, it added.

Growth is expected to pick up in 2026 as consumption and private investment gradually recover, the EBRD said, adding that risks, related to weak external demand, trade disruptions and "challenges in the relationship with the EU", were skewed to the downside.

The EBRD pointed to a quicker expansion of new capacity in the automotive and battery sectors among upside risks.

Public finances "remain strained", the BRD said, adding that the budget deficit was expected to stay over 4pc of GDP in 2025.

 

Source: MTI – Hungary’s national news agency since 1881. While MTI articles are usually factual, some may contain political bias, and readers should be aware that such content does not reflect the position of XpatLoop, which is neutral and independent.

Since the goal of XpatLoop is to keep readers well briefed, right across the spectrum of opinions, MTI items are shared to ensure readers are aware of all narratives within the local media.

XpatLoop believes in empowering readers to form their own views through complete and comprehensive coverage. To facilitate this XpatLoop has a balanced range of news partners, as you can see when you surf around XpatLoop.com

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