Hungary Interest Rate

The National Bank of Hungary held its key interest rate unchanged at 6.50% for the eleventh consecutive meeting on August 26, in line with market expectations. The overnight deposit and collateralized loan rates also remained at 5.5% and 7.5%, respectively. GDP rose by 0.1% year-on-year in Q2 2025, according to preliminary estimates, reflecting subdued economic growth. Economic growth is expected to pick up from next year, supported by rising real wages, government tax cuts boosting consumption, and stronger exports due to improved European performance and capacity-increasing investments. Headline inflation eased to 4.3% in July, remaining above the central bank’s tolerance band, and is expected to remain above the band for the rest of 2025. The unemployment rate remained low, while wage growth slowed in May. Given persistent inflationary pressures and global uncertainties, the National Bank of Hungary maintains a cautious and restrictive monetary policy stance.