Hungarian forint reaches 1-year peak as new inflation figures emerge: Have Orbán Cabinet measures failed?
The Hungarian national currency dropped below the psychological 400/EUR barrier earlier today. However, the latest inflation figures from Hungary soon followed. Against the US dollar, the forint was also at a 1-year peak—until the Hungarian Central Statistical Office (KSH) released its latest data.
Inflation shows no signs of slowing
According to 444.hu, this morning one euro cost less than 400 forints. However, the worse-than-expected May inflation figure pushed the exchange rate back above that psychological barrier. Against the USD, the forint reached a one-year high earlier in the day, but began to weaken after the publication of the new figures by the Hungarian Statistical Office.
The Hungarian News Agency (MTI) reported that Hungary’s annual consumer price index rose to 4.4% in May from 4.2% the previous month, according to figures released by the Central Statistical Office (KSH) on Wednesday. This increase comes despite government efforts to curb rising inflation—a significant challenge to the Orbán cabinet’s re-election hopes ahead of the 2026 general election. According to 444.hu, the profit margin caps introduced by National Economy Minister Márton Nagy appear to be failing, now three months into their implementation.
- Hungarian pharmacies announce price restrictions
Hungarian pharmacies announce price restrictions government must address root causes, says OKSZ
The National Trade Association (OKSZ) issued a strongly worded statement in response to the inflation data. The statement asserted that traders were not responsible for the inflation, and that the margin caps had not benefitted consumers. The OKSZ emphasised that traders did not pass on the losses incurred from government-imposed price reduction measures to customers, and there was no evidence of cross-pricing. They accused the government of sweeping problems under the rug by failing to address the real causes of inflation. According to the association, fostering healthy competition in the sector would reduce prices more effectively than the current government measures, which they claim are exacerbating the problem.
Shocking figures released
Food prices rose by 5.9%, or 4.5% excluding the cost of eating out. Egg prices surged by 26.0%, flour by 25.0%, and cooking oil by 25.3%. However, margarine prices fell by 30.0%, and dairy product prices decreased by 7.4%.
Household energy prices increased by 5.3%, driven largely by an 11.4% rise in piped gas prices. Prices of consumer durables edged up by 2.2%, while motor fuel prices dropped by 4.8%. Prices of spirits and tobacco products rose by 7.3%, and clothing prices by 2.1%. The cost of services increased by 5.9%.
- Hungary and its neighbors: where are fuel prices cheaper right now?
The consumer price index (CPI), adjusted for better comparability across European Union member states, stood at 4.5%. Core inflation, which excludes volatile food and fuel prices, was 4.8%. The CPI for the basket of goods typically purchased by pensioners also came in at 4.5%.
On a month-on-month basis, consumer prices rose by 0.2%. Food prices increased by 0.6%, and household energy by 0.8%, while motor fuel prices declined by 1.9%.
Government response
In a statement following the release of the new data, the National Economy Ministry cited government actions taken to curb what it described as “unjustified” price increases.
According to the ministry, a 10% markup cap on a selection of basic food items had led to an average price drop of 19.6%, while a 15% markup limit on certain household products had reduced their prices by 26.9%.
The ministry also noted that banks, insurers, and telecommunications companies had voluntarily introduced price limits, and discussions with pharmaceutical companies on voluntary price restrictions were ongoing.
Voluntary price caps could reduce headline inflation by 0.3 percentage points, the ministry added.