Central Bank Base Rate in Hungary
The Central Bank Base Rate ended 2022 at 13.00%, up from the 2.40% end-2021 value and higher than the reading of 3.00% a decade earlier. For reference, the average Central Bank Base Rate in Eastern Europe was 8.40% by the end of 2022. For more interest rate information, visit our dedicated page.
Hungary Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for Hungary from 2024 to 2014.
Source: Macrobond.
Hungary Interest Rate Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Central Bank Base Rate (%, eop) | 0.90 | 0.60 | 2.40 | 13.00 | 10.75 |
10-Year Bond Yield (%, eop) | 2.01 | 2.08 | 4.51 | 8.98 | 5.86 |
3-Month Interbank Rate (%, eop) | 0.16 | 0.75 | 4.21 | 16.18 | 9.96 |
Central Bank leaves rates unchanged in January
Hungary’s rates hit a European high: At its meeting on 28 January, the Central Bank decided to leave its base rate at 6.50%, in line with market expectations. As a result, Hungary’s interest rates became the joint-highest in the EU, alongside those of Romania.
Above-target inflation drives hike: Intensifying price pressures chiefly drove the decision; inflation breached the Bank’s 2.0–4.0% target band in December, reaching 4.6% and exceeding analysts' expectations. Additionally, the Bank noted that inflation is set to increase further in January, and the risk of it rising further has recently grown. Against this backdrop, inflation could return within the target band later than the Bank envisaged in December. Recent weakness in the forint has also fueled price pressures and likely further warranted the Bank’s hold.
Bank to resume cuts in Q2: In a subsequent briefing, officials noted that interest rate cuts in the next months were unlikely; recent pressure from the government to cut rates amid an economic recession is unlikely to sway the incoming Governor Mihaly Varga, who stated at his confirmation hearing in December that his focus will be returning inflation to the 3.0% target. The majority of our panelists expect the Bank to resume its rate cuts in Q2 and our Consensus is for about 100 basis points in total rate reductions by the end of 2025. Unexpected forint weakness and a potential phase-out of utility subsidies pose upside risks to inflation and, therefore, the policy rate. The Bank will reconvene on 25 February.
Panelist insight: ING analysts said: “We think a total of 75bp of rate cuts this year is realistic in Hungary, which would be roughly in line with the average size of expected easing cycles (between 75bp and 100bp) in the region. However, if price pressures surprise to the upside and inflation expectations become less anchored, 2025 could also pass without a single rate cut.”
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 24 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.
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