There are currently not so many arguments in favor of the forint. Growth was disappointing in the second quarter, while at the same time the cutting cycle paused at 6.75% after inflation surprisingly rose to over 4% again in July. Core inflation has also risen back to 4.7% and is the worst performer among the CE3, Commerzbank’s FX analyst Antje Praefcke notes.

Forint is likely to remain under pressure

“Inflation is likely to have fallen again slightly in August, as the data due to be published today should show. But the job remains challenging for the central bank (MNB). According to reports, there is a risk for an expansionary fiscal policy since President Victor Orban could apparently change his plans for budget consolidation in order to put together large spending packages in the run-up to the 2026 elections.”

“According to the Ministry of Finance, the budget deficit, which had risen to 7.6% of GDP during the pandemic, was planned to fall to 2.9% in 2026. The new draft budget will be presented in November and could render these plans moot.”