Consumer prices were 4.3% higher on average in September 2025 than a year earlier. Compared to August, prices were unchanged on average. Increases in food prices had slowed to 4.7% in September from 5.9% in August. An average of 10.6% more was paid for electricity, gas, and other fuels, with natural and manufactured gas being 23.4% more expensive and electricity 2.3% more expensive. Alcoholic beverages and tobacco prices rose by 7.1%, with the cost of tobacco increasing by 8.7%, according to the latest report by the Central Statistical Office (KSH).
On a monthly basis, food prices lessened by 0.2%, mainly due to a 4% decrease in the cost of seasonal food items. Overall, September consumer prices were slightly better than predicted.
“In September, inflation was slightly more favorable than analysts’ expectations, with an annual price increase of 4.3%, similar to the previous two months, while consumer prices remained unchanged on average on a monthly basis. Following the surge at the beginning of the year, inflation processes have, therefore, stabilized, and in fact, core inflation, which describes fundamental inflation processes, has again remained within the central bank’s tolerance band,” Dániel Molnár, of economic think-tank GFÜ Gazdaságkutató, commented on the fresh data.
He added that household energy continued to drive inflation upwards, contributing nearly 0.5 percentage points to overall inflation in September. This is due to the higher heating demand caused by the cold weather at the beginning of the year, which, because of the methodology used, results in a persistently high price increase. This is only expected to subside next year, provided milder weather and energy efficiency measures by households reduce heating demand. Others think the market impact of the fresh inflation data would be minimal.
“The annual inflation data, which was essentially in line with our preliminary expectations (4.4%), was brought by the typical during-the-year seasonality of the pre-COVID years, so it is not a particular surprise, and as a result, its market impact may be minimal. The domestic indicator, which significantly deviated from the inflation target band at the beginning of the year, continues to be above the upper limit of the target band, for the tenth month now,” Péter Kiss, investment director of fund management company Amundi, says.
According to Orsolya Nyeste of Erste Bank, several administrative price-limiting measures and the strengthening of the forint have contributed to moderating inflation compared to the high levels at the beginning of the year.
“It is favorable that the monthly price index stagnated in both August and September, in which seasonal effects also played a role. However, the annual indicator is still above the target range, despite the fact that margin caps artificially distort downwards,” she said.
As for the remainder of this year and the early part of 2026, analysts’ forecasts vary slightly.
“According to our expectations, the inflation rate may remain above the central bank’s [2-4%] tolerance band until the end of the year. In a favorable case, it may return to below 4% by the end of the year, but according to our forecast, this will definitely happen in January, with the elimination of the significant price increases at the beginning of this year,” Molnár of GFÜ said.
According to him, the data from recent months clearly shows that there is no significant price pressure in the economy. The overall rate of monthly price changes does not deviate from historical levels, and the stronger forint exchange rate also means favorable prospects.
The most significant areas of uncertainty for the inflation path are the exchange rate, the extent of revaluations at the beginning of the year, the weather (through overhead prices), and the timing of the elimination of margin regulations.
“We expect that the rate of monetary deterioration may remain within the central bank’s tolerance band throughout next year, but close to the 4% upper level. The central bank’s target may only be reached permanently at the beginning of 2027. On an annual average, this year’s 4.6% inflation may be followed by 3.6% next year,” Molnár says.
Erste’s Nyeste says her colleagues continue to see risks as more balanced. The recent development of industrial producer prices, subdued energy and imported product prices, and the stronger forint are expected to continue to support the decline in inflation. At the same time, the elimination of the price-cap measures introduced by the government may result in a one-off spike in inflation.
However, the timing of this is very uncertain, and there is a good chance that these measures will remain in place beyond the end of November, she adds. However, based on the current data, it seems increasingly certain that if the margin stops are not eliminated by the end of November, inflation could return to the central bank’s target range by the end of the year.
“We expect to see a higher inflation figure in October, and then a spectacular decrease from November due to base effects. In addition to the stability of the forint exchange rate, this scenario may bring up the issue of resuming interest rate cuts at the end of the year,” according to Amundi’s Kiss.
This article was first published in the Budapest Business Journal print issue of October 17, 2025.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
