Hungary Interest Rate

Central Bank stands pat in May

Hold aligns with market expectations: On 26 May, Magyar Nemzeti Bank (MNB) left the base rate unchanged at 6.25% for a third straight meeting, as anticipated by markets.

Inflation remains contained but global risks keep MNB cautious: The decision to hold rates was driven by two factors. Inflation remained below the midpoint of the MNB’s 2.0–4.0% target in April, and the forint has strengthened, helping reduce the costs of imports. Still, the MNB demurred from a cut amid persistent geopolitical tensions and the risk that higher global energy prices could still push inflation up.

Rate cuts still possible this year: The Bank’s forward guidance remained cautious but hinted that sustained favorable inflation trends could allow for gradual rate cuts. Most of our panelists expect inflation to remain within the MNB’s target range in 2026 on average, supported in part by a strong forint, and so they project the MNB to cut again by the end of this year, pushing the base rate to a five-year low. Still, uncertainty remains, with upside risks to the base rate stemming from persistent commodity price pressures—particularly linked to the Iran conflict—and possible tightening by the ECB. The Bank is scheduled to reconvene on 10 June.

Panelist insight: ING’s Peter Virovacz commented: “We would not rule out a rate cut or a rate hike later this year; the direction will depend on how the geopolitical situation evolves and whether the Hungarian forint can strengthen significantly.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Hungarian interest rate projections for the next ten years from a panel of 29 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Hungarian interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Hungarian interest rate projections.

Want to get access to the full dataset of Hungarian interest rate forecasts? Send an email to info@focus-economics.com.