Domestic inflation was still high in 2025 compared to the EU

Consumer price index of 35 European countries in 2025 (percentage)

Source: Eurostat

Among the Visegrad countries, Hungary had the highest rate of currency depreciation, closely followed by Slovakia, which is struggling with similar macroeconomic challenges, while Poland is in the middle of the European field. The Czech Republic is the only player among the four that has managed to keep its inflation below the EU average. In 2025, the euro area inflation rate was 2.1%, and the European Central Bank forecasts 1.9% for 2026. This means that the average data for the eurozone is in line with the ECB’s inflation target, although inflation is well above the 2% target in several Eastern European member states, including the aforementioned Slovakia and Croatia, as well as in the Baltic countries.

Domestic inflation has gradually decreased since the fall of 2025, but the uncertain geopolitical situation, the unpredictable customs environment and the surge in energy prices can be assessed as significant upside risks. In addition, the freezing of fuel prices until May 1 will significantly contribute to the stabilization of the price index. According to the MNB’s announcement, the domestic inflation target can be sustainably achieved by the second half of 2027, which is in line with the GKI’s forecast. We expect inflation of 4%, close to the upper limit of the tolerance band, for 2026, and then the increase in the price level may already be within the tolerance band in 2027.