Hungary's central bank eyes lower inflation target to meet 2030 euro entry goal

The Monetary Council of the National Bank of Hungary plans to reduce the present 3% inflation target, reflecting growing political pressure to join the euro area by 2030. Adoption requires meeting the European Central Bank’s 2% price-stability condition, and Hungary presently holds the highest target among countries outside the eurozone. The last adjustment of Hungary’s target occurred in 2005, when it was lowered from 3.5% to 3%.

By contrast, Romania’s target of 2.5% still leaves it lagging behind the required economic benchmarks, a reversal from its near-convergence in 2015. Recent data show a modest rise in Hungary’s inflation, driven by higher prices for alcohol, tobacco and durable goods, but the exact figures are not disclosed. The government hopes the target reduction will align Hungary with the Maastricht criteria and enable the forint’s replacement with the euro.