Inflation will be staggeringly high in Hungary, but there is good news

Even though the world has been still struggling with sky-high prices due to global inflation, the situation is projected to take a better turn relatively shortly. In Hungary, however, in addition to the Central Bank’s interference, a significant drop in energy carrier prices would be necessary to achieve that. Read on for further details of the forecast.

Food staple and raw material prices are decreasing

Although the government announced that the inflation rate would continue to increase in the coming months, the following year looks somewhat brighter. Global inflation is expected to decrease which will also positively affect Hungary. A downward trend has been observed in the prices of food staples and raw materials for some time, said Zoltán Török, senior analyst at Raiffeisen Bank to vg.hu. In the case of energy carriers, this has not occurred yet, but according to the expert, it will happen within half a year.

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What about gas prices?

The price of gas is still above USD 200 (EUR 200,16). – reports magyarnemzet.hu. Here, a more significant weakening would be needed to match the values below USD 90 (EUR 90,07) in January or USD 20(EUR 20,02) a year and a half ago. According to Barnabás Virág, vice president of the Hungarian National Bank, the main influencer is the extremely hectic movement of European electricity and gas prices. “There is a noticeable turning point in the global financial deterioration”, he said.

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Inflation could ease by next summer

Raiffeisen’s analyst expects that inflation in Hungary may peak at around 20 percent at the end of the year. However, the beginning of next year may bring a price decrease. Furthermore, he believes that inflation could ease significantly next summer. In addition to the Central Bank’s interference, a significant drop in energy carrier prices is necessary to achieve that. “On the other hand, what would definitely help right now is a stronger national currency, with a EUR quotation of HUF 375-380. In that case, even imported inflation could be reduced.” – said Dávid Németh, senior analyst at K&H Bank.

Source: vg.hu, magyarnemzet.hu