The National Bank of Hungary has published its analysis supporting the Monetary Council’s decision to lower the medium-term inflation target from 3% to 2.5% from Jan. 1, 2028. The symmetric tolerance band will remain unchanged at plus or minus 1 percentage point. The lower target aligns Hungary more closely with regional central banks and the European Central Bank while improving its ability to meet the price stability criterion for euro adoption. The bank estimates that the change could take about 1.5 to two years to be fully reflected in inflation expectations and the inflation path. Its baseline model indicates a cumulative transitional cost equivalent to 0.2% of one year’s gross domestic product, with no effect on potential GDP. The decision reflects Hungary’s price and economic convergence, subdued inflation and lower expectations, but the bank said disciplined fiscal policy and wage growth aligned with productivity will be needed to limit adjustment costs.
2026-09-22National Bank of Hungary
National Bank of Hungary sets 2.5% medium-term inflation target from January 2028
The National Bank of Hungary will lower its medium-term inflation target from 3% to 2.5% from Jan. 1, 2028, while retaining the plus or minus 1 percentage point tolerance band. The bank expects the transition to take about 1.5 to two years and estimates a cumulative cost equivalent to 0.2% of one year’s GDP.