Hungary’s inflation fell to 1.7%, undershooting central bank and market expectations, reinforcing expectations for further monetary easing.
Hungary’s annual inflation rate declined to 1.7% in June, below both the National Bank of Hungary’s (NBH) and market forecasts. The softer-than-expected print strengthens the case for additional rate cuts in the coming months.
Markets are pricing in around 150 basis points of easing, targeting a terminal rate of 4.50%. The NBH has already signaled potential cuts in July and August, with room for further reductions if inflation remains subdued.
The forint showed limited reaction, as traders had already priced in a dovish policy path. Analysts suggest the central bank may accelerate cuts if inflation continues to surprise to the downside.