Inflation in Hungary remains among Europe’s top 3 despite unorthodox Orbán cabinet measures

Despite the Hungarian government’s desperate measures to curb inflation, price increases in Hungary remained among the top three in Europe in May. According to Eurostat’s latest data, inflation was higher only in Romania and Estonia among EU member states.

According to Portfólió, a Hungarian economy-focused media outlet, the European Union’s statistical office, Eurostat, released profoundly disheartening data about Hungary’s inflation. The news outlet believes that without the Hungarian government’s intervention, inflation in Hungary would have been the highest in Europe, rather than the third highest in May.

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In the Eurozone, inflation decreased to 1.9% from 2.2%, while in the EU it stood at 2.2% after April’s 2.4%. This means that, in the Eurozone, inflation fell below the European Central Bank’s 2% target for the first time since last September.

Eurostat recorded the highest inflation in Romania (5.4%), driven by the weakening of its national currency, the RON. Estonia ranked second with 4.6%, while Hungary closely followed the Baltic state with 4.5%. Slovakia and Croatia were next, while Cyprus was at the bottom of the list with almost 0%.

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According to Portfólió, without the government’s strict profit caps—imposed to curb inflation and reduce the prices of certain food and non-food items—real inflation would be around 6%.

Additional economic news from Hungary

Fe-Group Invest, the waste management unit of listed alternative energy company ALTEO, inaugurated a HUF 1 billion recycling plant in Budapest on Wednesday. Csaba Gondola, the State Secretary for Circular Economy, said the investment was supported by HUF 300 million in grant funding awarded through a tender called by the Energy Strategy Institute Nonprofit.

The plant has the capacity to recycle 15,000 tonnes of bottles and cans annually, collected under Hungary’s mandatory deposit-refund system. Fe-Group’s new recycling line can produce 11,400 tonnes of PET bales and 3,050 tonnes of aluminium per year. The investment arm of MOL, which owns MOHU Mol, holds a stake in ALTEO.

Hungarian M&A activity climbs 19% in 2024

Merger and acquisition (M&A) activity in Hungary rose by 19% in 2024, outpacing the global average, according to data compiled by consultancy Deloitte. Local investors accounted for 54% of transactions. Deals in the energy sector surged by 60%, while transactions in the financial sector rose by 25%.

Zsolt Vajda, a partner at Deloitte Central Europe, said M&A activity could gain further momentum in 2025, supported by lower interest rates and declining inflation. However, he warned that geopolitical and trade tensions remain significant risks.