Hungary's economy strengthens as inflation cap removal nears

Analysts note a surge in confidence toward the Hungarian economy. The forint has appreciated by more than 10 % since spring and government bond yields have fallen by about 200 basis points. ING Bank’s lead analyst Virovácz Péter projects that the fiscal deficit could drop below 3 % of GDP by 2030, with GDP growth expected at 1.5 % in 2026 and 2.6 % in 2027. Inflation is forecast at 2.3 % for this year and 3.8 % next year, while the central bank expects the policy rate to end the year at 5‑5.25 %.

The Hungarian National Bank says ending the price‑margin stop (árrésstop) will not jeopardise the 3 % inflation target. Inflation is expected to stay near the lower end of the target band, around 2 %, and the economy is projected to grow 1.7 % year‑on‑year in Q1, with a slower 1.4 % pace in Q2 and a 2 % expansion for 2026. Officials note that the removal of the margin caps could raise prices only modestly, as stronger forint and lower global commodity prices offset the effect.