Two-year high: the future of the forint according to analysts

The Hungarian forint has climbed to a two-year high in recent weeks, and analysts at MBH Bank expect its momentum against the euro to hold through the rest of 2025 — a trend that could help ease inflation expectations.

Forint seen below 400 by year-end

Zoltán Árokszállási, head of MBH Bank’s Analysis Center, told reporters in Budapest on Wednesday that the bank forecasts an average annual HUF/EUR exchange rate of 401 in 2025, with the forint strengthening to 397.5 by year-end. For 2026, analysts project an average of 400.3.

The recent firming of the currency has been driven by both global and domestic factors: expectations of rate cuts by the US Federal Reserve, Hungary’s relatively high 6.5% base rate, and the central bank’s consistently tight monetary stance.

Slow growth now, faster recovery ahead

This year, Hungary’s economy has been supported by services, retail, and hospitality, while unfavorable weather hit agriculture and weak demand weighed on industry. MBH Bank projects GDP growth of just 0.8% in 2025, but sees a recovery in 2026, with external demand and renewed investment helping the economy expand by up to 3%.

read also: Forint reaches multi-year highs against major currencies as salaries continue to rise

Inflation and monetary policy outlook

Senior capital markets analyst Márta Balog-Béki said the bank expects average inflation of 4.5% in 2025, easing further to 3.9% in 2026. Core inflation fell to 3.9% in August — the lowest in four years.

Hungary’s base rate has remained at 6.5% for over a year, and MBH Bank does not expect a change before the end of 2025. However, anticipated rate cuts by both the European Central Bank and the Fed could give the Hungarian central bank room to ease in the coming years. Analysts forecast the base rate could drop to 6.0% by end-2026 and to 5.0% by 2027.

Deficit and labor market trends

The government deficit is projected at 4.6% of GDP in 2025, an improvement from last year’s 4.9%. Employment continues to expand, with unemployment seen averaging 4.4% in 2025 and 4.2% in 2026.

Árokszállási also noted that while the forint’s strength supports disinflation, the planned phase-out of the government’s “price margin cap” in the second half of 2026 could temporarily lift inflation again.

read also: Understanding the euro to Hungarian forint exchange rate

Read here for more news about the euro Hungarian forint exchange rate