How does the forint exchange rate affect consumer prices?

This article is available for reading in Trade magazin 2026/04

Guest writer: Erik Szilárd Stix (GKI)

According to model estimates, the exchange rate effect was relatively weak in 2010, but later the inflationary impact of exchange rate movements intensified, with the pass-through rising to around 0.5 in 2018, while the exchange rate itself showed greater fluctuations. As a result, the weakening forint contributed significantly to the high inflation environment until 2022.

The exchange rate effect was particularly high in 2020 and 2022

In 2020 the depreciation of the forint prevented deflation from developing, while in 2022 the weakening of the exchange rate contributed significantly to the consumer price index jumping to nearly 15%. On the other hand, in 2023 the strengthening of the forint moderated high domestic inflation, reducing the rate of price hikes by about 2 percentage points. In 2024 1.6 percentage points of the 3.7% increase in the consumer price index were caused by the weakening of the forint. Our estimation is that the strengthening of the forint in 2025 moderated the consumer price index, but this effect isn’t immediate: it appears after two to three quarters and runs out in about a year. The forint strengthened significantly in the third and fourth quarters, which reduced the 2026 price level by 2.3 percentage points in the first half of the year.