Inflation slowed to 1.7% in June 2026, prompting National Bank of Hungary Governor Mihaly Varga to say further summer rate cuts may be possible after the base rate was lowered to 6% in late June.
The central bank cut its 2026 average inflation forecast to 1.8% from 3.8%, with Varga saying easing price pressures, lower global risks and stable financial markets support a cautious, data-dependent approach.
Hungary’s banking system held a record 21% capital adequacy ratio and ample liquidity, which Varga said leaves lenders able to keep financing households and businesses despite global uncertainty.
At a July 13 meeting in Budapest, Varga and incoming IMF executive director Helmut Ettl reviewed economic developments and future cooperation, underscoring the role of regional coordination as central banks navigate shifting inflation trends.