Washington, 25 April 2025 – Escalating geopolitical tensions in recent weeks had increased global risks, according to MNB Governor Mihály Varga, who was attending the IMF’s spring meeting in Washington. Varga pointed out that, in the current uncertain international environment, the strong fundamentals of the Hungarian economy and the improvement in the country’s balance indicators compared to previous years were grounds for optimism. The rapidly changing environment and risks surrounding the inflation path continued to warrant a disciplined, patient monetary policy.
Governor Varga pointed out that international financial market sentiment was uncertain and strongly exposed to rapidly changing news related to trade policy tensions. As he said, if high tariffs remained in place, they could significantly retard global economic growth. The central bank governor pointed out that the fundamentals of the Hungarian economy were stable and the country’s balance indicators had been steadily improving in recent years, which gave cause for optimism in terms of the domestic risk assessment. In 2024, the current account surplus had continued to rise, while the primary budget balance was close to equilibrium, Varga reported. Domestic inflation had started to decline again in March. Inflation was likely to continue falling in the coming months, he explained, adding that it was in the interests of the Hungarian economy to maintain financial market stability and keep inflation close to the central bank’s target on a sustained basis, despite the uncertain external environment. This required continuing the MNB’s disciplined, patient monetary policy, given the risks surrounding the inflation path. The Monetary Council had kept the base rate at 6.5 per cent since September 2024. During his official visit, Governor Varga attended several bilateral meetings in addition to the IMF meeting, conferring with the governor of the central bank of Kazakhstan, the IMF’s deputy managing director and the team of experts responsible for Hungary, as well as Szabolcs Takács, Hungary’s ambassador to Washington.