Hungary’s CPI reached 3.2% (chart) in October, rising from 3% in the previous month, but below the 3.5% consensus, according to figures from the Central Statistics Office (KSH) on November 12. The data was a pleasant surprise, as most analysts forecasted an uptick in the CPI due to the low base. Energy and fuel prices retreated, pushing down the index.

The monthly increase was 0.1% and core inflation was unchanged in the same period.

The easing of inflationary pressures is reflected in the decline in the annualised core inflation to 4.5% from 4.8% in September. In annual terms, core inflation moved up just 1.4% in the last quarter.

One negative surprise was the steep rise in food prices, up 4.5% year-on-year, the largest annual increase so far this year. On a monthly basis, food prices went up 0.7%. Repricing in the service sector was moderate in October, which caught analysts off guard. Price growth decelerated from 8.4% in September to 7.2% in annual terms and fell 0.9% m/m due to the one-off discounts in mobile and internet subscription fees and lower holiday-related service prices.

Consumer durable prices contracted 0.3% y/y but edged up 0.1% month-on-month. This shows there is no sign of the weaker forint feeding into prices yet, but that may change as the currency has shed 3% in the last 30 days. Household energy prices fell 4.8%, as prices were 9.5% lower and electricity prices declined 0.7% in annual terms and motor fuel prices contracted 5.2%.

 

 

National Economy Minister Marton Nagy said measures such as the online price comparison platforms helped keep prices in check and added the strong real wage growth in 2025 will boost GDP by over 3%.

Looking ahead, analysts caution that the disinflationary trends may not be sustained into the coming months. The forint’s recent depreciation and high real wage growth could exert upward pressure on consumer prices. Moreover, the statistical base effect will likely fade as the months progress, adding further momentum to inflation.

MBH analysts expect inflation to edge up to 4.4% at the end of the year and average 3.7% for the year. The bank raised its forecast for 2025 by 0.2pp to 3.8%, citing the weakening currency.

In terms of monetary policy, the slowdown in the core and headline inflation data would support arguments for easing, but the Hungarian National Bank will most likely pause in November again after policymakers signalled that current rates may stay for an extended period if necessary.

After a 25bp cut in September, policymakers left the base unchanged at 6.50% at the October 22 meeting.