Hungary: Inflation comes in at highest level since December 2023 in July
Inflation increased to 4.1% in July, above June’s 3.7%. July’s result was the highest inflation rate in seven months, breaching the Central Bank’s 2.0–4.0% target band ceiling and surpassing market expectations. Rebounding price growth for food and textiles plus stronger price rises for transportation and recreation drove the acceleration.
Additionally, core inflation rose to 4.7% in July from June’s 4.1%. That said, annual average inflation fell to 6.4% in July (June: 7.4%).
Lastly, consumer prices rose 0.72% in July over the previous month, swinging from the 0.05% drop logged in June. July’s figure was the highest reading since March.
ING analysts Peter Virovacz and Dávid Szonyi commented on the outlook for inflation and monetary policy:
“Looking ahead, the next two months may see some easing in the year-on-year inflation rate, mainly due to last year’s high base, but the rate should remain close to 4%. The next big jump in inflation is expected to come in October when the figure could be well above 4%. […] From a monetary policy perspective, the latest inflation data would clearly push the central bank towards a cautious stance when deciding on the level of the base rate.”