The current target is 3 per cent, with a tolerance band of plus or minus one percentage point. According to the central bank, lowering the target brings Hungary closer to regional practice and to the European Central Bank\u2019s 2 per cent inflation target.<\/p>\n
The change will nevertheless begin influencing monetary policy before 2028 because central banks set interest rates based on their medium-term inflation outlook rather than current inflation alone.<\/p>\n
Lower inflation target supports Hungary euro adoption<\/p>\n
The MNB said Hungary\u2019s economic convergence with the euro area and the decline in inflation expectations created room to lower the target. The central bank expects a lower-inflation environment to contribute to more predictable economic conditions and, over the longer term, lower nominal interest rates and financing costs.<\/p>\n
It also explicitly linked the decision to Hungary\u2019s preparations for joining the euro area.<\/p>\n
MNB Governor Mih\u00e1ly Varga said earlier in September that euro adoption required a disciplined and coordinated strategy between monetary and fiscal policymakers. He said Hungary should introduce the euro in a way that allows the economy to continue converging both before and after joining the currency union.<\/p>\n
The Hungarian government has meanwhile said it aims to meet the Maastricht criteria required for euro adoption around 2030. That does not amount to a formal date for replacing the forint with the euro: meeting the criteria would be a prerequisite for entering the final stages of the process.<\/p>\n
If you missed it \u2013 Hungary sets 2030 euro target: Government reveals when budget deficit could fall below 3%<\/a><\/p>\n What Hungary still has to do before introducing the euro<\/p>\n Lower inflation is only one element of euro-area accession.<\/p>\n EU countries seeking to adopt the single currency must meet convergence requirements covering price stability, sustainable public finances, long-term interest rates and exchange-rate stability. They must also participate in the Exchange Rate Mechanism, known as ERM II, for at least two years without severe exchange-rate tensions.<\/p>\n Hungary is not currently part of ERM II, and the European Commission states that the country has no formal target date for adopting the euro.<\/p>\n The Commission\u2019s June 2026 Convergence Report also concluded that Hungary did not yet fulfil the conditions for joining the euro area. At the time of the assessment, Hungary failed the price-stability criterion, while Hungarian legislation, including rules governing the MNB, was not considered fully compatible with requirements for participation in the Eurosystem.<\/p>\n Inflation has since fallen, which helps explain why the MNB now sees scope for setting a lower target.<\/p>\n Public finances remain a major challenge<\/p>\n Fiscal policy remains another important part of the equation. Hungary is still subject to the EU\u2019s excessive deficit procedure, although the procedure is currently held in abeyance following the Commission\u2019s assessment of government measures.<\/p>\n The European Commission\u2019s spring forecast projected Hungary\u2019s general government deficit at 6.2 per cent of GDP in 2026 and 5.8 per cent in 2027. Public debt was forecast to rise from 74.6 per cent of GDP in 2025 to 75.1 per cent in 2026 and 76.8 per cent in 2027.<\/p>\n![\"euro](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/09\/Hungarian-forint-to-euro--1280x640.webp\")
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Source: MTI<\/p>\n