Hungary will lower its inflation target to Poland’s level from 2028 onward

Hungary lowers its inflation target to 2,5% from 2028

In September, the Hungarian central bank decided to cut its inflation target from 3,0% to 2,5%. The new level will apply from 1 January 2028 and will be the same as in Poland. The Monetary Council also kept the symmetrical deviation of 1 percentage point, meaning the tolerance band around the target.

In practical terms, this means the National Bank of Hungary wants inflation to be at a level close to the one the NBP has used for years over the medium term. The difference is that Hungary is changing its formal benchmark only in two years, not right away.

In a statement on 22 September, the central bank said the new target fits in with the frameworks adopted by other major central banks. It also noted that the previous level was clearly higher than in the euro area and in some countries in the region.

This is also important from a Polish perspective. For people exchanging money, working abroad or running a small business in the region, the move shows that central banks are increasingly aiming for similar policy frameworks. That does not automatically mean a weaker forint or a quick change in exchange rates.

Against the regional backdrop, Hungary is joining the group of countries that prefer a target close to 2,5%. In Poland, the NBP has maintained the same inflation target since 2004, with an allowed deviation of 1 percentage point.

Sources

1. Central Statistical Office (inflation indicators)