Inflation falls within the target range in November

Latest reading: Consumer prices rose 3.8% in annual terms in November, following a 4.3% rise in the previous month. November's reading fell within the Central Bank’s 2.0–4.0% target range for the first time in a year. Still, the downtick was predominantly due to base effects for food and fuel prices. Relative to the previous month's figures, there were milder price pressures for food and non-alcoholic beverages (+0.6% on a year-on-year basis vs +1.7% in October), housing and energy (+7.4% vs +7.9% in October) and transport (+0.3% vs +1.6% in October). In contrast, price pressures were higher for clothing and footwear in November (-0.3% vs -0.7% in October). Meanwhile, core consumer prices were up 4.1% in annual terms in November, following a 4.2% rise in the previous month. Finally, consumer prices rose 0.05% in November in month-on-month terms, following a 0.02% increase in the previous month.

Panelist insight: ING’s Peter Virovacz and Zoltán Homolya commented on the outlook for inflation and monetary policy: “Looking ahead, the inflation rate may continue to decline in the coming months due to base effects. The extent of this decline will depend largely on the impact of the latest margin freeze expansion, which will be evident in the December inflation indicator. In contrast, the recent surge in the price of computer equipment may also have a noticeable effect. Still, it's quite possible that we will see an inflation rate of less than 2% in February, after which inflation could accelerate again. […] There is a significant chance that the benchmark rate will remain at 6.50% for most, if not all, of 2026. This is because the Hungarian economy may be subject to shocks over the next one to two years that carry clear inflationary risks, such as government demand stimulus, the removal of price shield measures, and double-digit minimum wage increases.”

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