Hungary’s industrial sector started the last quarter with disappointingly weak data. And despite real wages beginning to increase in September, shoppers have not returned to the stores more frequently yet, according to October’s retail trade data. The good news is that inflation continued to fall in November, though analysts suggest a cautious approach even here.
Inflation in Hungary is still the strongest in central Europe while the central bank has the highest interest rates in the European Union after sharp tightening last year, partially to also buck up a forint that hit record lows. But like other policymakers in central Europe, Hungarian rate setters are seeking to keep rate the policy stable for now as the economy slows sharply under the weight of sky-high inflation that has been pushed higher by soaring food and energy prices.