A few snippets on most recent developments

HUNGARY - In Brief 29 Jan 2026 by Istvan Racz

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By and large, the MNB's January rate-setting meeting on Tuesday proved to be a non-event, as expected. But, please, remain being warned that a base rate cut, most likely by 25bps, may come in late March, provided the usual early-year wave of price adjustments is found to have been completed with a favourable result, which is quite likely. For sure, decision-makers could reasonably argue for a 50bps cut and even for holding the existing 6.5% level, and that is why we think a 25bps compromise decision is most probable.Despite the most recent material uptick by global oil and European gas prices, headline CPI-inflation is still likely to deep-dive in January, to around 2.4% yoy from the actual 3.3% yoy of December. The basis for that drop is a massive base effect, the monthly rate reaching 1.5% in January 2025, against the likely 0.6% (or so) in this January. Please, note that higher international oil prices have not been reflected in domestic prices as yet; retail fuel prices actually moved slightly downwards on average this month. Indeed, local fuel prices are adjusted twice a week, but they have only a relatively loose link to market developments, as they are set by MOL more or less administratively.In addition, retail gas prices are fixed, as you know. The whole country's gas consumption may have risen by roughly 17% yoy in January, because of cold weather. This is estimated to have added 0.2% to the CPI, roughly, as regards the direct impact, but only in principle, as the government has said it would take over the extra cost for the month. For the budget, this would cost HUF50bn or so if only gas is covered, and a maybe some HUF10-30bn more if electricity and network...