The National Bank of Hungary Predicts an “Increasingly Pronounced” Decline in Inflation in Late 2023

Inflation is a hot topic around the world, with very high inflation rates for many countries. However, the National Bank of Hungary (NBH) expects inflation to decline later this year. Specifically, the NBH expects the decline to be “increasingly pronounced.”

The Prediction

The prediction that inflation will decline more quickly came at the very end of 2022. At the time, the official report predicted inflation to be 15.0% to 19.5%.

Reasons for the Decline

The report included some of the reasons for the predicted decline in inflation, mentioning both internal and external causes. These include:

  • Reduced energy and raw material costs globally
  • Improved production changes
  • Reduced freight costs
  • Reduced global food prices
  • Economic growth slowdown in Hungary
  • Reduced disposable incomes in Hungary, reducing consumption
  • Tax measures’ base effects fading

The report specifically mentioned that the high inflation was largely due to the high energy costs. Corporate profits and the prices of products were also important factors.

A More Recent Look

Given that this prediction was made in late December, it’s helpful to look at what has happened since then. This also gives us an idea of whether the prediction is on track to come true.

February Inflation

The data for February showed that inflation (CPI) was still above 25%, but barely. The 25.4% figure was slightly lower than it had been, which is in line with the predictions. After all, the predicted sharp decline is for later in the year.

Quarterly Inflation Report

The NBH released its quarterly inflation report in March. The report predicts that tax-adjusted core inflation will be 16.9% to 19.4% in 2023. The report also estimates that the inflation rate will be just 4.4% to 6.4% in 2024.

European Commission Predictions

The European Commission has a similar prediction, predicting Hungary’s headline inflation to be 16.4%. This would be the highest in the EU.

The Inflation Decline Will Require Effort

Overall, the figures and continued predictions from the NBH are on track with its initial assessment in late December. That being said, the bank is clear that this will require effort. The monetary policy has been described as “very disciplined and tight.”

Those in charge of the central bank call for eliminating price caps and other measures they describe as “slamming on the brakes.” Meanwhile, they say that the government has “pushed the accelerator.”

Experts say that it will be tough for Hungary to get its inflation down significantly, but they haven’t ruled out the possibility.


Several months ago, the NBH predicted that late 2023 would see a sharp decline in inflation. It is too early to tell whether that will come true, but more recent figures and predictions indicate it is very possible. It may, however, require a great deal of effort from the National Bank of Hungary.


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