Hungary’s Central Bank Is Caught Between Inflation and Growth

ING Bank /

22-05-2026

ING expects the National Bank of Hungary to leave rates unchanged at 6.25% for now, but sees growing tension between geopolitical inflation risks and mounting pressure for eventual easing.

Rising energy insecurity linked to the Middle East, combined with fiscal stimulus and stronger domestic consumption, continues to keep inflation risks elevated.
At the same time, improving market confidence, declining bond yields, and renewed euro-adoption optimism are creating conditions for potential rate cuts later this year.
ING now sees two possible paths: rates staying unchanged through 2026, or a more dovish scenario involving cuts beginning as early as June.
The strengthening forint increasingly creates its own policy dilemma, as policymakers balance currency strength against export competitiveness and financing conditions.

The report captures a broader Central European problem: inflation may be slowing statistically while geopolitical fragmentation keeps the real economy structurally inflationary.