Hungary's December inflation disappoints central bank

Consumer prices rose by 3.3% year-on-year in December 2025. Relative to the 3.8% observed in November, the annual growth rate of prices fell by 0.5 percentage points. Standing at 3.8%, core inflation fell by 0.3 percentage point. Core inflation excluding indirect tax effects fell to 3.6%.

Incoming inflation data was above the projection in the December Inflation Report,

the central bank said in its flash analysis.

The decline in the annual consumer price index was primarily driven by a decrease in the inflation of fuel and processed food prices. Core inflation, which was lower than in November, was caused primarily by processed foods; this was partly offset by the rising annual price dynamics of market services. Among the Bank’s measures of underlying inflation developments capturing persistent inflationary trends, calculated on a year-on-year basis, the inflation of sticky-price products fell by 0.2 percentage point and stood at 5.2%. In contrast, core inflation excluding processed food rose to 4.7% and the inflation of tradables and market services excluding the price-reducing effect of the price restrictions at the time of their introduction, rose to 5.7%.

In December, the monthly repricing was higher than the 2017-2020 average for market services and tradables, while for food, it was lower.

MNB staff noted that households’ inflation expectations remain at higher levels than during the period when the inflation target was achieved. Companies’ expectations for retail sales price changes and price expectations for services declined. Both remained at a subdued level in December.

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