Leaving for a summer holiday risks missing a number of important events in today's Hungary

HUNGARY - In Brief 03 Jul 2026 by Istvan Racz

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In hindsight, PM Magyar appears to have been right when he said that no one in Hungary's public service should plan a long holiday this summer. Returning from our own ten-day leave, we found an impressive list of important changes, which were the following:1. The MNB base rate was reduced by 25 bps to 6% on June 23, and Governor Varga saw room for two further 25 bps cuts in July and August, unless something major happens in the negative direction. Mr. Varga described this as an 'easing mini-cycle', to be followed by another review of the situation, with the next quarterly inflation report, in September. We are translating this as Mr. Varga suggesting largely that the said rate cuts will most likely take place unless the forint weakens significantly for whatever reason.2. As a basis for this, the MNB revised its inflation forecast very substantially in its Q2 inflation report. They do not expect CPI-inflation to go above 5% yoy by Q4 any more. Instead, they expect 1.8% average inflation this year, the headline rate slowly moving up towards the 3% target this year and in 2027. The difference from late-March forecast mainly goes back to the fact that at that time, global oil prices were substantially higher and the forint was markedly weaker than currently. Here is their new forecast chart:3. Meanwhile, PM Magyar held a key speech in parliament on June 22, in which he identified fight against corruption as the main point in his political mission. He stressed that in the first 40 days of its existence, the Tisza administration has found essentially nothing regular in the operation of its predecessor. Mr. Magyar repeatedly claimed that reviewing current and past matters, no...