MNB Goals: Reducing Inflation, Keeping Price Stability

The new leadership of the National Bank of Hungary (MNB) is committed to reducing inflation, and its primary goal is to achieve and maintain price stability, the new governor of the central bank, Mihály Varga said at the opening conference of the Hungarian Chamber of Commerce and Industry in Budapest.

According to statement by MNB, the governor stressed that, despite the unpredictable international environment, the Hungarian economy's equilibrium positions have improved significantly, the financial system is stable and growth prospects are favorable.

The central bank governor recalled that the decade to 2020 saw a significant slowdown in the global economy, with increased fiscal expenditure, higher public debt ratios in developed countries and a return to inflation not seen for many decades.

In Hungary, the consumer price index has been rising gradually since September 2024, rising to 5.5% in January 2025, mainly due to rising fuel and food prices, Mihály Varga said. The central bank governor warned that a sustained return of inflation would erode the purchasing power of wages and the fiscal balance, undermine confidence, reduce economic growth and raise the cost of financing public debt.

Therefore, “the National Bank of Hungary is pursuing a disciplined, consistent, anti-inflationary monetary policy, while closely monitoring external and internal developments and the risks surrounding the outlook," according to Mihály Varga.

He was of the view that the Hungarian economy's growth is broad-based: high employment and real wage growth, expanding consumption and high household savings show an improving growth outlook.

Mihály Varga added that in the current economic circumstances, the central bank can contribute most effectively to the achievement of macroeconomic objectives by achieving price stability and maintaining financial market stability. The path to lower fiscal interest expenditure, improved consumer confidence, the creation of a predictable investment environment and a pick-up in economic activity lies in maintaining price stability.