Varga noted after participating at the European Central Bank’s Forum on Central Banking in Sintra, Portugal, that central banks in Europe and America had bumped up their inflation forecasts while lowering their projections for GDP growth.
He said that, in light of external risks, such as global trade and supply chain developments, U.S. tariff policies and rising geopolitical tensions, MNB had also lowered its 2025 forecast for GDP growth in Hungary to 0.8%.
Hungary’s growth is driven by expanding domestic consumption, thanks to a stable labour market, he added.
Although the geopolitical environment is putting the resilience of European banks to the test, Hungarian financial institutions remain well capitalised and with ample liquidity, Varga said.
MNB is cooperating with banks to boost corporate lending, which could play a key role in advancing sustainable economic growth, he added.
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