The National Bank of Hungary left its benchmark interest rate unchanged at 5.5% at its October 2026 meeting, as expected, after four rate cuts this year, the latest being a 25bps reduction in August from 5.75%. Annual inflation remains low, edging up to 1.3% in August from 1.2% in July, below the central bank’s June forecasts. At its September meeting, policymakers lowered the medium-term inflation target to 2.5±1%, to enter the monetary policy horizon from 2028, citing favorable inflation expectations. Average expected inflation was left unchanged for 2026, raised to 3.1% for 2027 and cut to 2.6% for 2028. The economic growth forecasts were lowered to 1.8% for 2026, 2.9% for 2027 and 2.8% for 2028, as extreme drought reduced agricultural output. Policymakers noted that global risks remain elevated, with geopolitical tensions continuing to pressure energy prices.