Hungary's Inflation Slows More Than Expected, Bolstering Case for Rate Cuts
Recent data revealed that inflation in Hungary has significantly slowed more than anticipated, strengthening the arguments for lowering interest rates. In August, the inflation rate was 10.4%, down from 13.6% in the previous month. Economists had expected a more modest decrease to 12%. This positive news regarding the decline in inflation provides the Hungarian central bank with new arguments for possible rate cuts in the coming months.
The reduction in inflation levels may also be attributed to the effective monetary policy implemented by the National Bank of Hungary and the influence of external factors such as global commodity price dynamics. Experts predict that the central bank may begin a rate-cutting cycle at its next meeting, especially if the downward trend in inflation continues.
However, despite the positive news about inflation slowing, concerns remain regarding rising prices of energy and food products, which may affect the central bank's future decisions. There are also risks associated with the international economic situation that could exert pressure on the Hungarian economy and, consequently, on inflation.
Thus, the current data showing a slowdown in inflation opens new opportunities for changing Hungary's monetary policy, emphasizing the need for prompt action by authorities to maintain economic stability and continue the recovery from the pandemic.
