Opposition calls for stable, strong forint

The opposition Democratic Coalition will work swiftly to ensure a stable and strong Hungarian currency should it be elected in next year’s general election, Klára Dobrev, the party’s candidate for prime minister, said on Wednesday.

According to fresh data, consumer prices in May grew by an annual 5.1 percent, an eight-year record, Dobrev noted at an online press conference. The price of cooking oil has grown by 25 percent in the past year, the price of eggs by ten percent, and the price of fuel by 36 percent, she said, adding that a stable forint would staunch inflation.

Meanwhile, Dobrev said a government run by the current opposition would set the medium-term goal of introducing the euro, adding that Slovakia, which introduced the single currency in 2009, had witnessed much slower price rises.

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Matolcsy flags Central Bank rate hike as early as June

Monetary policy is set to shift towards a more hawkish stance as early as June, with a possible hike in the base rate, György Matolcsy, the governor of the National Bank of Hungary (NBH), told a conference on Wednesday.

A persistent rise in inflation would endanger the recovery, he said.

The Hungarian economy can withstand a rate hike, the governor said, adding that given the risk to the economy posed by inflation, the Monetary Council is compelled to raise interest rates.

Prime Minister Viktor Orbán told the conference that the government was aiming for the deficit to shrink to 5.9 percent of GDP in 2022, down from 8.1 percent in 2020 and a projected 7.5 percent this year.

Orbán said full employment and the loan moratorium were key steps to avoiding the long-term economic effects of the pandemic. The moratorium on loan payments was pushed back until September to allow for talks on a gradual phasing out of the measure, he said.