Nagy Brushes off Threat of Inflation Return

Analysis

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Minister of National Economy Márton Nagy said Hungarians shouldn't anticipate a return of high inflation because the main factors behind the recent spike in the country's CPI were no longer a threat, speaking at an event organized by the Hungarian Compliance Academy last week according to portfolio.hu.

Nagy said high energy prices, "excessive" corporate profits and high fiscal and current account deficits had accounted for 70% of the recent record inflation. He added that none of those factors were a threat in 2024.

He noted that the government had helped reduce inflation with the regulated utility price scheme for households and fixed-price energy contracts for businesses while introducing price caps and mandatory sales to address overpricing. He added that the current account balance had improved as the price of energy imports moderated.

Nagy put this year's CPI at 4-5% and next year's at 3-4%, which he said was "acceptable" for an emerging market economy outside the eurozone.

He added that the budget deficit could fall under the 3%-of-GDP threshold in 2026.

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