Hungary's Inflation Rate Surpasses Central Bank's Tolerance Level
February 2025 sees inflation at 5.6%, prompting a government response to rising food prices.
Hungary’s inflation rate remains a critical concern as the Central Statistical Office (KSH) reported a consumer price increase of 5.6% in February 2025 compared to the previous year.
This marks the third consecutive month that inflation has exceeded the tolerance band set by the Hungarian National Bank (MNB), which is under the new leadership of Varga Mihály.
The Hungarian National Bank has emphasized the urgency of tackling inflation, stating, 'There are no pardons regarding inflation; achieving price stability benefits everyone.' The MNB underscores that a durable reduction in inflation and the restoration of price stability are essential conditions for sustaining and gradually enhancing the economic growth that has recently resumed.
The current inflationary pressures have been felt most acutely by consumers in the food sector, with food prices rising by 7.1% in February.
In light of these developments, Prime Minister Viktor Orbán announced measures aimed at controlling food prices.
Starting mid-March, a cap will be imposed on the profit margins of retailers for thirty essential food items, limiting those margins to 10%.
Orbán indicated that previous offers from retailers did not meet government expectations, prompting the need for intervention.
He highlighted the drastic profit margins seen recently, mentioning increases of 40% for eggs and more than 80% for butter and sour cream as unacceptable.
The MNB has reiterated its commitment to maintaining strict monetary conditions to push inflation back within the desired 2-4% policy band.
The bank welcomes the government's prioritization of domestic inflation reduction and expresses readiness to support this initiative with its available measures.
This marks the third consecutive month that inflation has exceeded the tolerance band set by the Hungarian National Bank (MNB), which is under the new leadership of Varga Mihály.
The Hungarian National Bank has emphasized the urgency of tackling inflation, stating, 'There are no pardons regarding inflation; achieving price stability benefits everyone.' The MNB underscores that a durable reduction in inflation and the restoration of price stability are essential conditions for sustaining and gradually enhancing the economic growth that has recently resumed.
The current inflationary pressures have been felt most acutely by consumers in the food sector, with food prices rising by 7.1% in February.
In light of these developments, Prime Minister Viktor Orbán announced measures aimed at controlling food prices.
Starting mid-March, a cap will be imposed on the profit margins of retailers for thirty essential food items, limiting those margins to 10%.
Orbán indicated that previous offers from retailers did not meet government expectations, prompting the need for intervention.
He highlighted the drastic profit margins seen recently, mentioning increases of 40% for eggs and more than 80% for butter and sour cream as unacceptable.
The MNB has reiterated its commitment to maintaining strict monetary conditions to push inflation back within the desired 2-4% policy band.
The bank welcomes the government's prioritization of domestic inflation reduction and expresses readiness to support this initiative with its available measures.
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