The National Bank of Hungary (Magyar Nemzeti Bank, MNB) published remarks by Governor Mihály Varga at the Bank for International Settlements annual conference in Basel, warning that geopolitical and trade developments were worsening the European and global outlook and could reignite inflation pressures in Hungary. He reiterated that price stability remains the MNB’s primary objective and framed international monetary policy cooperation as critical in a turbulent period. Varga cited escalation of the Middle East conflict, United States tariffs and global countermeasures as key sources of uncertainty. He said the MNB expects Hungary’s economic performance to pick up gradually in the second half of the year, projecting GDP growth of 0.8% in 2025, followed by 2.8% in 2026 and 3.2% in 2027, while inflation is anticipated to sustainably return to the 3% target in 2027, implying monetary policy must remain prudent and patient. Separately, Varga held bilateral talks with Taleh Kazimov, Governor of the Azerbaijani central bank, with the two sides expressing an intention to strengthen cooperation on specialist knowledge sharing, technical assistance and financial digitalisation. He is also scheduled to travel to Sintra to attend the European Central Bank’s annual conference.
National Bank of Hungary 2025-06-29
National Bank of Hungary Governor projects 0.8% GDP growth in 2025 and inflation returning to the 3% target in 2027
At the Bank for International Settlements conference, Hungary's Governor Mihály Varga highlighted geopolitical and trade tensions as threats to the European and global economic outlook, potentially reigniting inflation in Hungary. He emphasized international monetary policy cooperation and projected Hungary's GDP growth to improve, with inflation returning to the 3% target by 2027. Varga also discussed enhancing cooperation with Azerbaijan's central bank on knowledge sharing and financial digitalization.