Experts Welcome Lower-than-Expected Inflation Figure

Hungary's annualized consumer price index (CPI)rose to 1.6% in September from 1.3% in the previous month.

The figure was a pleasant surprise for analysts who had expected 1.8%. In the inflation data, the rise in fuel prices was offset by a further decline in food prices – rather than the expected increase – and a more moderate rise in service fees.

In a social media post, National Bank of Hungary (MNB) governor Mihály Varga said headline CPI was low historically and in international comparison. He stated that the fresh data was in line with the baseline scenario in MNB's latest Inflation Report and added that the central bank supports the country's sustainable growth by achieving and maintaining price stability.

In a comment, ING Bank chief analyst Péter Virovácz was of the opinion the acceleration in CPI was "much more modest" than expected, while core inflation edged lower. So far, the weakening of the Hungarian currency, the forint has not been reflected in price changes for either food or services. He added that a 0.5% month-on-month decline in service prices came as a "real surprise".
ING Bank puts year-end CPI at 2.4%. Early next year, however, companies may already factor the cost increases that occurred in the second half of the year into their prices, which could cause inflation to rise temporarily to around 3.5%, according to Péter Virovácz.

Erste Bank analyst János Nagy stated that headline inflation was under the consensus and supported the announcement of the central bank's new 2.5% mid-term inflation target from 2028. He added that higher energy prices were starting to feed into local producer prices, while global food prices were on the increase. He put average annual inflation at 1.8% for 2026 and 3.0% next year.

Gábor Regős, chief economist at Gránit Fund Management, was of the view that the slower-than-expected rise in prices is yet another pleasant surprise, meaning that Hungarian inflation remains within the inflation target – and, in fact, below the lower bound of the target range.
Factors contributing to low inflation include low global food prices, a stable and stronger-than-before forint exchange rate, and low inflation expectations.
The latest data continues to point to a moderate inflationary environment, but rising energy prices and fluctuations in the forint exchange rate remain risks.

In a monthly analysis released after the inflation data publication by the Central Statistical Office (KSH) earlier this week, the MNB said the increase in CPI could be linked to the accelerating price dynamics of fuels. Headline inflation was "broadly in line" with the projection in the September Inflation Report and below analysts' expectations, according to the central bank.
The MNB's measure of core inflation excluding indirect tax effects – a bellwether indicator of underlying inflation – edged down to 1.9% in September from 2.0% in the previous month.

The central bank's indicator for demand-sensitive inflation, which excludes processed foods from core inflation, was flat at 3.3%.
The indicator for sticky price inflation, which includes items for which retail prices vary, on average, no more than 15% a month, inched up to 3.9% from 3.8%.
The MNB said that households' inflation expectations "remain moderate", while companies' expectations for retail sales price changes increased, but decreased for service price changes compared to the previous month. Both indicators remained "subdued overall", it added.