Economy 8 October 2025, 1:34pm

Hungarian central bank reveals how much inflation would be without margin caps

Portfolio

September's 4.3% year-on-year inflation figure announced on Wednesday was in line with the September Inflation Report forecast, according to the Hungarian central bank's (MNB) assessment. The central bank also presented a scenario of inflation without the impact of margin caps for the first time, sending a clear message to the market that it does not intend to change interest rate conditions.

On Wednesday morning, the Central Statistical Office (KSH) announced that consumer prices had risen by 4.3% in September, matching the August increase. This was slightly lower than expected - the consensus forecast of analysts polled by Portfolio came in at 4.4%.

The incoming data was in line with the projection in the September Inflation Report,

the MNB said in its assessment.

The central bank's analysis is particularly important now, given that Economy Minister Márton Nagy stated at the Portfolio Budapest Economic Forum conference on Tuesday that the time had come for an interest rate cut. However, the central bank made it clear on Tuesday that its view had not changed since the end of September, and that it sees no reason to consider an interest rate cut. Zoltán Kurali, Deputy Governor of the MNB, also communicated this during the conference panel discussion on Tuesday.

Mandatory and voluntary price restriction measures continued to have an inflation-reducing effect of 1.5 percentage points,

the MNB said today.

"The greatest effect can be tied to the price margin restriction on foods. Besides this, the voluntary price restrictions by banks and telecommunication companies and the effect of the price margin restrictions on household goods also restrain inflation,"

it added.

In this regard, the MNB has introduced a new measure showing underlying developments. The inflation of tradables and market services excluding price restriction measures rose to 5.2%, which marks an uptick from August.

In recent months, another key indicator monitored by the MNB has been households' inflation expectations. The current analysis emphasises that these remain high.

In September, corporate expectations for retail sales price changes continued to fall. There was a slight rise in price expectations for services, although they remained at a subdued level in September.