Hungary’s Central Bank Set to Hold Rates Steady Amid Inflation Risks, Weak Growth Outlook
Hungary’s central bank is widely expected to leave its base interest rate unchanged at 6.5% for the eighth consecutive month during its policy meeting on May 27, according to a Reuters poll of 14 analysts.
The decision comes as inflation remains a concern despite signs of moderation, and economic recovery lags behind expectations.
The National Bank of Hungary (NBH) has adopted a cautious monetary stance, with Governor Mihaly Varga—appointed earlier this year—reaffirming that the fight against inflation is “not yet over.” Inflation eased to 4.2% in April, down from over 5% earlier in the year, but remains above the central bank’s comfort zone.
Analysts surveyed expect minimal easing ahead, with the median forecast projecting the base rate to decline only slightly to 6.25% by end-2025.
Morgan Stanley economist Georgi Deyanov noted that the NBH is likely to maintain its current rate and cautious tone, while also acknowledging the improving inflation trend. However, the bank is expected to flag persistent risks and may revise its GDP and inflation forecasts downward in its June core meeting.
The central bank’s hawkish stance comes amid sluggish growth, with the economy projected to expand by just 1% this year, significantly below the NBH’s earlier forecast range of 1.9% to 2.9%.
Governor Varga, a close ally of Prime Minister Viktor Orban and former finance minister, has made clear that rate cuts are off the table for now, emphasizing stability and inflation control over short-term growth stimulus.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
