Hungary’s Inflation Surprise Reshapes Rate-Cut Expectations

The ING analysis examines how unexpectedly weak Hungarian inflation data could materially alter the National Bank of Hungary’s policy path in the coming months.

• Headline inflation slowed to 1.8% year-on-year in May, below both ING and market expectations, despite ongoing geopolitical and energy market disruptions.
• The report attributes the decline largely to food deflation, lower household energy costs, and the strength of the Hungarian forint, although services inflation remains elevated at 4.3%.
• ING now expects inflation to average 2.6% in 2026 and sees growing scope for a 25bp or 50bp NBH rate cut later this month.

Read the full report for a detailed breakdown of Hungary’s inflation dynamics and the implications for monetary policy and regional markets.