Hungary's Central Bank Holds Rate at 6.25% as Fiscal Deficit Widens and Unemployment Stays Low

The Magyar Nemzeti Bank (MNB) kept its base interest rate at 6.25% at the May 26 meeting, leaving the overnight deposit and loan corridor unchanged at 5.25%‑7.25%. Inflation in May was 1.8%, well below the EU average of 3.2%, and within the bank’s 2‑4% tolerance band.

Hungary’s public‑sector accounts showed a modest surplus of 43.5 billion for the central sub‑system in May, but the overall central government deficit widened to 3,806.3 billion forints, 35.9% higher than a year earlier and reaching 90.2% of the annual budget estimate.

Labor market data released by the Central Statistical Office indicated 216 thousand unemployed persons, a 4.5% unemployment rate, and a slight decline in total employment compared with the previous year. Tourism figures showed a drop in foreign overnight stays, partly due to a sharp fall in visitors from Israel.

A separate MNB analysis of bank fees identified Gránit Bank as offering the cheapest current‑account packages, while Raiffeisen Bank was the most expensive. Analysts expect that, given the low inflation and improving risk assessment, the MNB may consider a 25‑basis‑point cut to 6.0% in the coming weeks, with the possibility of further reductions if external risks remain muted.