In December 2025, inflation in Hungary slowed further. In 2026, the average annual inflation rate could be between 3.2% and 3.8%, based on an analysis by the Oeconomus Economic Research Foundation.
In December 2025, inflation continued to slow, falling from 3.8% in November to 3.3% on an annual basis. This means that inflation measured by the Central Statistical Office (KSH) averaged 4.4% in 2025. In November and December last year, the inflation rate was within the central bank’s inflation target of two to four percent and is expected to remain in this range in the coming months.
Core inflation, which measures the underlying inflation process, slowed from 4% in November to 3.8% in December (year-on-year), also remaining within the central bank’s tolerance range. This brought core inflation in Hungary to an annual average of 4.6%.
Compared to November, inflation changed less significantly in the second half of the year and remained relatively stable. From November to December, consumer prices rose by only 0.1% overall, including:
- food prices fell by 0.2% on a monthly basis (the price cap was extended to additional product groups from December 1, which also affected prices)
- fuel prices fell by 1.7%,
- clothing prices rose by 0.3%,
- household energy prices rose by 0.9%
- and service prices rose by an average of 0.8%.
Based on the analysis, the following factors influenced inflation in 2025:
Services
Prices for services rose significantly at the beginning of 2025, mainly due to price adjustments. Last year, telecommunications and financial service providers as well as insurance companies voluntarily froze their prices as a result of government negotiations. The positive effects of this have been felt since the spring.
Medicines
Last year, in addition to service providers, players in the pharmaceutical sector also reached an agreement with the government to freeze prices. Under the agreements, the prices of the medicines concerned were voluntarily reduced to the level of December 31, 2024, fixed at that level, and will remain in effect until the end of June 2026.
Exchange rate
The forint appreciated significantly against the euro and the dollar during 2025, contributing to the stabilization of inflation.
Compared to the beginning of 2025, the Hungarian currency appreciated by 6.3% against the euro and 17.4% against the dollar by the end of the year.
Fuel prices
Fuel prices fell by 8.6% year-on-year in December last year, while on a monthly basis (from November to December) they fell by 1.7%.
Food prices
Food inflation fell significantly in 2025, from 6-7% at the beginning of the year to below 3% in December (2.6% on an annual basis), and prices also fell on a monthly basis in the last third of the year (with the exception of November).
In addition to the appreciation of the forint, the price cap measure introduced in March 2025, also played an important role: initially, the price range for 30 basic food products was capped, and this measure was then continuously expanded over the course of the year.
Based on market and government calculations, the price cap measures as a whole (including agreements with banks and telecommunications companies) are leading to inflation that is around 1.5 percentage points lower than it would be without them.
Household energy
Household energy prices rose by 6.4% in 2025, compared to 2024. In December last year, prices in this product group rose by 0.9% within a month, primarily due to higher consumption (more and more people are falling into the higher price bracket, which is above average consumption).
The Oeconomus Economic Research Foundation believes that the slowdown in inflation could continue in the first months of this year, taking into account base effects.
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Via Oeconomus Economic Research Foundation; Featured photo: Pexels
