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In July, the consumer price index in Hungary fell to 4.3% from 4.6% in June (year-on-year), while the monthly price level change showed a 0.4% increase compared to June. The base effect played a significant role in the slowdown in inflation. Other important positive effects on domestic inflation include the continued stability of the forint against other currencies and voluntary price restrictions on medicines, but clothing prices also held back during the summer, reported the Oeconomus Foundation.
Core inflation, which captures underlying inflationary trends, slowed to 4% in July on an annual basis. Inflation is being driven up by food prices, and within that, by a significant increase in the prices of vegetables and fruit, which is mainly due to unfavorable weather conditions (drought) in Hungary. In addition, household energy prices rose significantly in July, and fuel and service prices also increased over the course of the month. Looking ahead, an autumn surge in inflation could be followed by a slowdown in price levels again at the end of the year. Inflation is expected to average around 4.7-4.8% in 2025, while forecasts for 2026 range between 3.7-4.1%.
According to the latest data from the Hungarian Central Statistical Office (KSH), inflation slowed to 4.3% in July from 4.6% in June (compared to the same period last year). The July inflation data exceeded preliminary analyst expectations, as market expectations were for a more significant slowdown in inflation (median analyst expectation: 4.1% year-on-year). The base effect played an important role in the slowdown in inflation, as the significant acceleration in inflation in July last year was “dropped” from the calculation of the indicator. Underlying inflationary trends are favorable, with core inflation slowing further in July to 4% (year-on-year).
As regards monthly price changes, consumer prices rose on average by 0.4% compared to June, partly due to one-off effects and external factors.
Based on data available for all 27 member states, the average inflation rate in the European Union was 2.3% in June 2025 (year-on-year). In the eurozone, the indicator stood at 1.9-2.0% in May-July, i.e. at the ECB’s inflation target. Lower external, imported inflation also has a positive effect on the Hungarian inflation rate.
We know the inflation rates for all 27 member states for June. According to these figures, the highest inflation rate in June was in Romania, with an annual rate of 5.8%, followed by Estonia with 5.2% (year-on-year). Slovakia and Hungary also ranked high in the list, both with an inflation rate of 4.6%. In Hungary, inflation slowed down in July on an annual basis (unlike in several other member states), which improved our ranking in the EU. Based on the data already published (Hungarian HICP index 4.2%), higher inflation than in Hungary was recorded in July in Estonia (5.6%), Slovakia (4.5%) and Croatia (4.5%) also recorded higher inflation than Hungary in July, and it is likely that inflation in Romania was also higher than in Hungary.
Via Oeconomus Foundation; Featured Image: Pixabay