Inflation rises in March from the prior month

Latest reading: Consumer prices were up 1.8% on a year-on-year basis in March, following a 1.4% rise in the previous month. As such, inflation inched up closer to the Central Bank’s 2.0–4.0% target range. Relative to the prior month's figures, there were higher price pressures for clothing and footwear (+0.7% in annual terms vs -1.0% in February) and transport (+0.5% vs -3.2% in February). Moreover, the variations in prices for food and non-alcoholic beverages plus housing and energy were the same as in the prior month (-3.2% and +3.8%, respectively). Meanwhile, core consumer prices increased 1.9% in annual terms in March, following a 2.1% rise in the previous month. Finally, consumer prices were up 0.36% in March in month-on-month terms, following a 0.12% increase in the prior month.

Panelist insight: ING’s Peter Virovacz and Zoltán Homolya commented on the outlook: “Inflation has essentially begun to rise from a 10-year low, and for now, the pace of acceleration remains moderate. We therefore estimate that 2026 average inflation might ultimately settle in the vicinity of—but somewhat above—the Central Bank’s 3.0% inflation target. However, this is unlikely to influence the stance of monetary policymakers in the short term, given that energy prices and the volatility of the forint continue to pose risks, and this may call for caution. At the same time, however, we cannot rule out the possibility of an interest rate cut this year. A favourable and steady turn in geopolitical developments and the projected inflation trajectory could provide an opportunity for a restart of monetary easing in the second half of the year, particularly towards the end of 2026.”

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