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The forecast in the fresh quarterly Inflation Report was lowered from 3.8% in the previous one released in September.
“While the consumer price index remains volatile, underlying inflation is projected to evolve more favourably over the coming year relative to the September forecast due to a stronger forint and an improved external cost environment,” according to the report.
The central bank forecasts average annual inflation of 3.3% in 2027 and sees the 3% inflation target being achieved, in a sustainable manner, in H2 2027.
The report notes that the decrease in global commodity and food prices as well as the pass-through of a stronger forint to purchase prices, have supported disinflation, while the headline and core inflation baskets have been characterized by more moderate monthly re-pricing than in the first half of the year.
Households’ inflation expectations remain stagnant, it adds.
The report augurs a pickup in GDP growth from 0.5% in 2025 to 2.4% in 2026 and 3.1% in 2027, as real wage growth and government measures support expanding consumption, Hungary’s export markets recover and investment projects finishing up boost capacity.
The baseline scenario for the inflation and GDP forecasts in the December report is surrounded by balanced risks, the authors said.
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