Inflation Could Reach 3 Percent Target by 2027

Inflation may fall back into the National Bank’s tolerance band at the beginning of 2026, and the economy may reach the 3 percent target at the beginning of 2027, said András Balatoni, the central bank’s director of forecasting, when presenting the September Inflation Report.

According to him, price control measures continued to curb inflation in August, but inflationary pressures remain noticeable in the case of market products. Inflation is expected to be around 4-4.5 percent for the rest of the year, 4.6 percent in 2025, and 3.8 percent in 2026.

The strengthening forint is already having an impact on manufacturing prices and imports, which is also moderating inflation.

Economic growth could be 0.6 percent this year, held back by weak agricultural performance, but rising real wages and government measures are ensuring brisk consumption.

The central bank expects GDP growth of 2.8 percent in 2026 and 3.2 percent in 2027, which could be helped by improving external demand and a resumption of investment.

Corporate investment may still decline this year due to the trade war and uncertainty, but a gradual recovery is expected from 2026. Residential investment may be stimulated by the Home (Otthon) Start program launched in September.

The budget deficit could be between 4.1 and 4.5 percent in 2025, which could decrease to 3.2-3.7 percent by 2027. The ratio of public debt to GDP could fall below 72 percent by the end of the forecast horizon. However, the central bank also warned of risks, including faster-than-expected consumption growth, increased geopolitical tensions, and prolonged weakness in the European economy.

Via MTI; Featured photo: Pexels

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