Even National Bank Governor Varga acknowledges that the Orbán cabinet’s economic figures are incorrect
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According to Mihály Varga, the governor of the Hungarian National Bank, the full-year GDP growth this year will be only 0.8%. The Hungarian government had previously talked about a flying start and 4% growth. Furthermore, the National Bank projects GDP growth of only 2.8% even in 2026.
Risk of GDP decline and inflation surge, says central bank Governor Mihály Varga
The National Bank added that the inflation rate could “decline persistently” to the tolerance band in early 2026 and reach the 3% inflation target in early 2027. The inflation report puts average annual inflation at 4.7% for 2025 and 3.7% for 2026.
The Hungarian National Bank expects a gradual recovery in H2 2025 and puts full-year GDP growth at 0.8%. It projects GDP growth of 2.8% in 2026. The Monetary Council said the baseline scenario in the report was surrounded by mostly upside risks to inflation and downside risks to growth.
At a press conference yesterday, Governor Mihály Varga said growth in household consumption was “vigorous,” but the decline in investments was “prolonged.” He said that mandatory and voluntary price restrictions had played a “significant” role in mitigating inflation, but also highlighted “strong repricing” among companies.
Varga said incoming macroeconomic data had been within the NBH’s forecast range. He added that households’ inflation expectations had diminished but were still high. He said the NBH could contribute to anchoring inflation expectations and achieving the inflation target sustainably by “ensuring a positive real interest rate.”