HUNGARY
Macro Newsletter O c t o b e r
2 0 2 6
Domestic News
D O M E S T I C
N E W S
Hungary’s Economic Recovery Amid Moderate Inflation and Labour Market Weakness Hungary’s economy expanded by 1.7% year-on-year in Q2 2026, matching Q1 and marking the strongest growth since Q2 2024. Growth was mainly supported by industry (+3.7%) and services (+1.9%), particularly professional, scientific, technical and administrative activities. In contrast, construction declined by 0.3%, while agriculture fell sharply by 12.4% due to severe drought. Household consumption remained a key growth driver (+4.5%), while gross fixed capital formation contracted by 6.3%. Despite continued weakness in the external environment, the economy is expected to maintain its positive trajectory, with 2026 GDP growth forecast at 1.8%.
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Hungary’s annual inflation rate rose to 1.6% in September 2026, up from 1.3% in August, marking its highest level since June. The increase was primarily driven by higher prices for fuels and other goods, while prices of alcoholic beverages and tobacco also continued to rise. In contrast, food, clothing and household energy prices declined. Core inflation edged down to 1.9% from 2.0%, indicating that underlying price pressures
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remained moderate. •
The National Bank of Hungary kept its benchmark interest rate unchanged at 5.5% in October 2026, following four rate cuts this year. The Bank also revised its medium-term inflation target to 2.5% ± 1 percentage point, effective from 2028, citing favourable inflation expectations. Inflation forecasts were unchanged for 2026, raised to 3.1% for 2027 and lowered to 2.6% for 2028. However, elevated global risks and geopolitical tensions continue to put pressure on energy prices, supporting the MNB’s cautious monetary policy stance.
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Hungary’s unemployment rate rose to 4.7% in July–September 2026, up from 4.5% a year earlier, with the number of unemployed increasing by 8,400 to 229,900. The unemployment rate stood at 4.5% for men and 4.9% for women, while the average job search lasted 11.6 months. Meanwhile, employment edged down by 10,000 year-on-year to 4.669 million, reflecting a slight weakening in labour market conditions.
Base rate evolution in Hungary, % 15 10 5 0
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Source: MNB
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Domestic News
D O M E S T I C
N E W S
Hungary’s Industrial Recovery Strengthens as Retail Growth Slows and Financial Markets Stabilise •
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Hungary’s industrial production grew by 8.7% year-on-year in August 2026, accelerating from 4.7% in July, driven by stronger manufacturing output, particularly in transport equipment (+43.3%) and computer, electronic and optical products (+30.2%). However, food, beverages and tobacco (6.8%) and electrical equipment (-9.8%) remained in contraction. Electricity and gas supply also declined by 13.1%. Overall, industrial production rose by 3.4% year-on-year in January–August, although performance remained uneven across sectors. Hungary’s retail sales growth slowed to 2.4% year-on-year in August 2026, down from 4.9% in July, marking the weakest increase since May 2025. Growth moderated across both
food (+0.5%) and non-food retail (+5.0%), while sales of food, beverages and tobacco continued to decline (-4.8%). Automotive fuel sales also decelerated to 3.1%. On a monthly basis, retail sales fell by 0.7% following a 1.0% increase in July, indicating a loss of momentum in household consumption.
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Meanwhile, Hungary’s financial markets continued to show greater stability despite persistent geopolitical uncertainty. As of 22 October 2026, the forint traded at around HUF 366/EUR, supported by improved post-election stability and relatively attractive interest rates. The 10-year government bond yield eased below 5.6%, moving against the upward trend observed in Western Europe and other CEE countries.
EUR/HUF ex. rate (2021-2026) 440 420 400 380 360 340 320
Source: MNB
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Energy Market Oil and Gas Prices Surge Amid Middle East Supply Risks
E N E R G Y
M A R K E T
Brent oil price (USD/Bbl) 115 95 85 75 65
2026.10.21
2026.09.21
2026.08.21
2026.07.21
2026.06.21
2026.05.21
2026.04.21
2026.03.21
2026.02.21
2026.01.21
2025.12.21
2025.11.21
2025.10.21
2025.09.21
2025.08.21
2025.07.21
2025.06.21
2025.05.21
2025.04.21
2025.03.21
2025.02.21
2025.01.21
2024.12.21
2024.11.21
2024.10.21
55
Source: Trading economics
EU DUTCH TTF Gas Price (EUR/MWh)
2026.10.21
2026.09.21
2026.08.21
2026.07.21
2026.06.21
2026.05.21
2026.04.21
2026.03.21
2026.02.21
2026.01.21
2025.12.21
2025.11.21
2025.10.21
2025.09.21
2025.08.21
2025.07.21
2025.06.21
2025.05.21
2025.04.21
2025.03.21
2025.02.21
2025.01.21
90 85 80 75 70 65 60 55 50 45 40 35 30 25 20
2024.12.21
European natural gas prices climbed above €88/MWh, approaching a fouryear high amid constrained Middle Eastern LNG supplies and historically low storage levels. Attacks on vessels in the Strait of Hormuz have delayed the recovery of regional exports, which remain around 80% below year-earlier levels. Limited alternative supply capacity raises the risk of tight market conditions extending into 2027. Meanwhile, European gas storage was 74.58% full as of 21 October, the lowest seasonal level since records began in 2009, leaving the region with a limited buffer ahead of winter.
105
2024.11.21
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Brent crude rose above $111 per barrel on 22th October , reaching a fivemonth high following a deadly drone attack on Saudi Arabia’s Shaybah oil field, intensifying concerns over Middle Eastern tensions and potential supply disruptions. Further uncertainty stems from US diplomatic staff withdrawals from Saudi Arabia and Ukrainian attacks on Russian oil infrastructure. However, rising Middle Eastern exports could limit further price increases, with Saudi crude shipments up 7.9% in August to their highest level since March. Russia is also expected to deliver its first diesel shipment to the US, potentially easing supply pressures.
2024.10.21
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Source: Trading economics
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Eurozone
E U R O Z O N E
Eurozone Inflation Reaccelerates, Germany’s Industrial Output Recovers •
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ECB policymakers viewed inflation risks as tilted to the upside. However, they stressed the need to keep all policy options open and avoid signalling further moves amid uncertainty surrounding the inflation outlook, geopolitical tensions involving the US and Iran, and Russia’s war in Ukraine. The ECB also noted that its 2.50% deposit rate remained within staff estimates of the neutral range, supporting a cautious, data-dependent approach to future monetary policy.
Eurozone annual inflation accelerated for the third consecutive month to 3.8% in September 2026, up from 3.2% in August, reaching its highest level since September 2023. The increase was driven mainly by energy prices, which surged by 18.9%, while services and food, alcohol and tobacco prices also rose faster. Core inflation edged up to 2.5% from 2.4%, while monthly consumer prices
increased by 0.6%. Inflation accelerated across most member states, including Germany (3.3%), France (3.4%), Italy (4.2%) and Spain (5.0%), reinforcing concerns over renewed price pressures in the euro area. •
Germany’s industrial production rose by 2.0% month-onmonth in August 2026, rebounding from a revised 1.2% decline in July and exceeding market expectations. This marked the strongest monthly growth since March 2025, driven primarily by a 9.3% increase in construction output. Excluding energy and construction, industrial production grew by 0.6%, supported by capital and consumer goods. However, automotive output fell by 5.4%, while energy production declined by 0.4%. On an annual basis, industrial output increased by 2.3%, recovering from a 1.8% decline in July, suggesting a gradual improvement in Germany’s industrial activity.
Eurozone main refinancing operations rate, % 5 4
EUR/USD ex. rate
3
1,19
2
1,17
1
1,15
0 10.2017 02.2018 06.2018 10.2018 02.2019 06.2019 10.2019 02.2020 06.2020 10.2020 02.2021 06.2021 10.2021 02.2022 06.2022 10.2022 02.2023 06.2023 10.2023 02.2024 06.2024 10.2024 02.2025 06.2025 10.2025 02.2026 06,2026 10.2026*
1,21
1,13 1,11 21.jan.26
21.febr.26
21.márc.26
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21.ápr.26
21.máj.26
21.jún.26
21.júl.26
21.aug.26
21.szept.26
21.okt.26
Source: Trading Economics
Source: ECB
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USA
M A C R O
U S A
US Inflation Rises as Labour Signals Diverge and Treasury Yields Ease •
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US annual inflation accelerated to 3.7% in September 2026, up from 3.4% in the previous two months, exceeding market expectations of 3.6%. The increase was driven mainly by surging energy costs, with gasoline prices up 34.2% and fuel oil prices rising 74.2% year-on-year. Shelter inflation also accelerated, while food inflation eased to 2.5%. Core inflation edged up to 2.6% from 2.4%, while monthly core inflation remained at 0.3%, reinforcing concerns over persistent price pressures and potentially limiting the scope for further Federal Reserve rate cuts. The US unemployment rate edged up to 4.2% in September 2026 from 4.1% in August, slightly exceeding market expectations. The number of unemployed rose by 78,000 to 7.11 million, although employment increased by 406,000 to 163.15
million. The labour force expanded by 485,000, lifting participation to 61.8% from 61.6%. Meanwhile, the broader U-6 unemployment rate eased to 7.6% from 7.7%, suggesting mixed labour market signals despite the slight increase in headline unemployment. •
The US 10-year Treasury yield fell to around 5.08% on 22 October, supported by safe-haven demand amid a global selloff in technology and AI stocks and renewed buying of government bonds. Signs of economic weakness, including declining housing starts and record-low pending home sales, also weighed on yields. Markets largely expect the Federal Reserve to hold rates steady at its next meeting, although persistent energy-driven inflation and rising oil prices have kept the possibility of a December rate hike in focus.
US 10 year Bond evolution, %
Source: Trading Economics
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Forecast Hungary
M A C R O
Economic indicators
2022
2023
2024
2025
2026*
Real GDP growth (%)
4.6
-0.9
0.6
0.5
1.8
Industrial output growth (%)
5.8
-5.5
-4.0
-3.2
3.4
Investments (%)
0.3
-10.2
-13.8
-4.3
2.3
Inflation (%)
14.5
17.6
3.7
4.4
1.8
Gross wages (%)
17.6
14.0
13.2
8.8
9.5
General government balance (% of GDP)
-6.2
-7.0
-5.1
-4.7
-7.5
Public debt (% of GDP)
74.1
73.3
73.5
74.6
77.5
Unemployment rate (%)
3.6
4.2
4.3
4.4
4.6
Base rate (end of year), %
13
10.75
6.5
6.5
5.5
10-year bond yield (end of year) (%)
8.98
5.93
6.5
6.87
5.9
F O R E C A S T
Source: Colliers
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