At its latest monetary policy meeting on 28 August, the Central Bank voted to cut the base rate by 25 basis points to 6.75%. The decision was not completely unexpected, as monetary authorities had hinted the possibility of a rate cut at their previous meeting, provided that the risk premium moderated markedly and the inflation outlook improved. That said, the timing of the move did surprised most market analysts, as a majority expected the rate cut to take place later this year. The decision to ease the reins followed the release of second quarter GDP figures, which showed that the economy fell back into recession. In the same vein, the Bank stated that "domestic demand is likely to fall further in the coming quarters [and that] investment will remain subdued, reflecting the weak outlook for economic activity, the unpredictable business environment and tight credit conditions". On the inflation side, the Bank acknowledged that data for June and July came in higher than expected and that, despite subdued domestic demand, consumer prices are "expected to remain significantly above the medium-term target into 2013, as a result of a series of increases in indirect taxes affecting consumer prices".
Hungary Monetary Policy
Central Bank lowers rates amid faltering growth
August 28, 2012
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Hungary Economic News
October 11, 2016
In September, consumer prices rose 0.2% from the previous month, contrasting August’s 0.4% decrease.
October 7, 2016
According to preliminary data released by the Statistical Institute (KSH) on 7 October, industrial output in August rose a working-day adjusted 3.5% from the same month last year, rebounding from July’s 0.1% decrease and marking a four-month high. On a monthly basis, industrial production increased a seasonally- and working-day adjusted 1.6% in August, which followed July’s 0.3% decrease.
September 26, 2016
The GKI economic sentiment indicator advanced slightly from August’s minus 3.9 points, which was the lowest reading in over two years, to the still-low level of minus 3.6 points in September.
Hungary: Central Bank leaves base rate at 0.90%, continues easing monetary conditions by capping main deposit facility
September 20, 2016
The Central Bank of Hungary (NBH) held all rates constant at its 20 September monetary policy meeting, but continued easing monetary policy conditions by using unconventional monetary policy instruments.
September 9, 2016
In August, consumer prices fell 0.4% over the previous month, coming in below July’s softer 0.2% decrease.