Hungary’s Inflation Undershoot Reopens the Easing Cycle

In this ING analysis, Peter Virovacz and Zoltán Homolya assess how sharply lower January inflation has shifted Hungary’s monetary outlook 

• Headline CPI fell to 2.1% YoY, with core at 2.7%, both below the central bank’s 3% target for the first time since 2019, supported by subdued services inflation and lower energy and fuel prices.

• Monthly repricing was unusually modest, while extended price shields and a strong forint delay any near-term reacceleration.

• ING now sees 25bp rate cuts in both February and March, barring a sustained forint shock.

Is this the start of a durable disinflation cycle—or a temporary policy window? The full note examines the risks.