The latest data from the Sigmanomics database shows Hungary’s core inflation rate increased to 4.20% year-over-year in November 2025. This figure exceeds the market consensus of 4.10% and marks a rise from the 3.90% recorded in October. The core inflation rate excludes volatile food and energy prices, providing a clearer view of underlying inflation trends. The persistence of inflation above the central bank’s 3% target highlights ongoing price pressures in the Hungarian economy.

Drivers this month

• Shelter costs contributed 0.22 percentage points to the increase.
• Services inflation remained elevated, adding 0.15 percentage points.
• Core goods prices rose moderately, contributing 0.10 percentage points.
• Used car prices stabilized, with negligible impact this month.

Policy pulse

The 4.20% core inflation print remains above the Hungarian National Bank’s (MNB) inflation target of 3%. This suggests that the MNB’s recent rate hikes have yet to fully temper inflationary pressures. The central bank’s policy rate currently stands at 11.75%, reflecting aggressive tightening since mid-2025.

Market lens

Following the release, the Hungarian forint (HUF) weakened by 0.30% against the euro, while 2-year government bond yields rose by 12 basis points. Breakeven inflation rates edged up slightly, signaling market expectations of sustained inflation. The mixed market response underscores uncertainty about the inflation trajectory and monetary policy effectiveness.

Core inflation is a key macroeconomic indicator that reflects underlying price stability. Hungary’s core inflation rate has trended downward from a peak of 5.70% in April 2025 but remains elevated relative to historical norms. The 12-month average core inflation rate now stands near 4.50%, well above the pre-pandemic average of approximately 2.50%.

Historical comparisons

• April 2025: Core inflation peaked at 5.70%, driven by post-pandemic supply constraints.
• July 2025: Rate declined to 4.40%, reflecting early effects of monetary tightening.
• October 2025: Stabilized at 3.90%, before the recent uptick to 4.20% in November.

Monetary policy & financial conditions

The MNB has raised its policy rate by 375 basis points since early 2025 to combat inflation. Despite this, core inflation’s recent rise suggests sticky price pressures. Financial conditions remain tight, with credit growth slowing and lending rates elevated. The central bank’s forward guidance signals a cautious approach, balancing inflation control with growth risks.

Fiscal policy & government budget

Hungary’s fiscal stance remains moderately expansionary, with a 2025 budget deficit projected at 3.80% of GDP. Government spending on social programs and infrastructure supports domestic demand, which may sustain inflationary pressures. Fiscal consolidation risks are limited in the near term but could tighten if inflation persists.

What This Chart Tells Us

Market lens

Immediate reaction: The HUF weakened 0.30% versus the EUR, while 2-year yields rose 12 basis points, reflecting market concerns about persistent inflation. Breakeven inflation rates nudged higher, indicating expectations of sustained price pressures.

Looking ahead, Hungary’s core inflation trajectory depends on several factors, including monetary policy effectiveness, fiscal discipline, and external shocks. The MNB’s current stance suggests further rate hikes are possible if inflation does not moderate.

Bullish scenario (20% probability)

• Inflation moderates to below 3.50% by mid-2026 due to successful monetary tightening and easing supply constraints.
• Fiscal consolidation reduces demand-side pressures.
• Geopolitical risks subside, stabilizing commodity prices.

Base scenario (60% probability)

• Core inflation remains around 4% through early 2026, gradually declining thereafter.
• Monetary policy tightens moderately, balancing growth and inflation risks.
• Fiscal policy remains neutral, with steady government spending.

Bearish scenario (20% probability)

• Inflation accelerates above 5% due to renewed external shocks or fiscal expansion.
• Monetary policy lags, losing credibility.
• Financial markets react negatively, pressuring the HUF and increasing borrowing costs.

Hungary’s November 2025 core inflation rate of 4.20% underscores persistent inflationary pressures despite aggressive monetary tightening. The data from the Sigmanomics database highlights the challenge facing policymakers balancing inflation control with economic growth. External risks, including geopolitical tensions and commodity price volatility, add uncertainty. Financial markets remain cautious, reflecting mixed sentiment. Structural inflation drivers such as wage growth and housing costs suggest inflation may remain elevated in the medium term. Close monitoring and calibrated policy responses will be crucial to anchoring inflation expectations and sustaining economic stability.

Key Markets Likely to React to Core Inflation Rate YoY

The core inflation rate is a critical gauge for monetary policy and market sentiment in Hungary. Several tradable assets historically track inflation dynamics closely. These include the HUFEUR currency pair, reflecting the forint’s sensitivity to inflation and policy shifts. The MOL stock, a major Hungarian energy firm, often reacts to inflation-driven commodity price changes. The OTP bank stock is sensitive to interest rate changes linked to inflation. On the crypto side, BTCUSD can serve as an inflation hedge, while the EURUSD pair reflects broader Eurozone inflation trends impacting Hungary.

Insight: Core Inflation Rate vs. HUFEUR Since 2020

Since 2020, Hungary’s core inflation rate and the HUFEUR exchange rate have shown an inverse relationship. Periods of rising core inflation typically coincide with HUF depreciation against the euro, as tighter monetary policy and inflation concerns weigh on the currency. For example, the inflation peak in April 2025 at 5.70% corresponded with a 4% HUF depreciation over six months. This dynamic highlights the importance of inflation control for currency stability.

FAQs

What is the significance of Hungary’s Core Inflation Rate YoY?

The Core Inflation Rate YoY measures underlying price changes excluding volatile items. It guides monetary policy and indicates inflation trends in Hungary.

How does the November 2025 core inflation compare historically?

At 4.20%, it is higher than October’s 3.90% but lower than the April 2025 peak of 5.70%, showing persistent but moderating inflation.

What are the main risks affecting Hungary’s inflation outlook?

Risks include external shocks, fiscal expansion, and geopolitical tensions, which could push inflation higher or disrupt monetary policy effectiveness.

Hungary’s core inflation remains stubbornly above target, challenging policymakers to carefully calibrate monetary and fiscal tools amid uncertain external conditions.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 11/13/25

Selected Tradable Symbols

• HUFEUR – Hungarian forint to euro currency pair, sensitive to inflation and monetary policy shifts.
• MOL – Hungary’s leading energy company, impacted by inflation-driven commodity price changes.
• OTP – Hungary’s largest bank, sensitive to interest rate changes linked to inflation.
• BTCUSD – Bitcoin against USD, often viewed as an inflation hedge.
• EURUSD – Euro to US dollar pair, reflecting broader Eurozone inflation trends affecting Hungary.