In May, inflation in Hungary unexpectedly declined to 1.8%, while consumer prices remained unchanged compared to the previous month.
Prices have been largely stagnant for months, the positive real interest rate has increased again, and the forint is trading close to a five-year high. However, the measures taken to curb inflation are placing an increasing burden on the economy, and the conflict with Iran could destabilize the situation at any time. The key question is therefore no longer only whether inflation can be kept low, but also what economic cost will have to be paid for it. Market analysts unanimously expect an interest rate cut in June, which the Hungarian economy may urgently need.
At first glance, inflation data from the first months of the year do not suggest that the Hungarian economy is facing significant price pressures. The annual consumer price inflation rate stood at 2.1% in January, 1.4% in February, 1.8% in March, and 2.1% again in April.
According to these figures, inflation has consistently remained close to the target level of the Hungarian National Bank (MNB).