The government’s targeted measures have curbed and suppressed inflation. Measures such as the online price monitoring system, by generating vibrant retail competition, help to ensure that inflation remains at a persistently low level, Márton Nagy, Minister of National Economy, evaluated in a statement on Tuesday.

He quoted the latest data from the Central Statistical Office (KSH), which indicated that inflation in June 2024 stood at 3.7 per cent, thus performing better than market expectations. Overall consumer prices did not change compared to the previous month. The minister hailed as a positive development the 0.3 per cent month-on-month decrease in food prices.

The minister highlighted that

low inflation has triggered a positive chain reaction in the national economy, with its beneficial effects increasingly felt by Hungarian families and businesses.

Márton Nagy noted that, thanks to the reduction in inflation, real wages have been steadily increasing since September, meaning that household incomes are worth more month by month. Rising real wages have gradually alleviated the precautionary attitudes of the population, reflected in increased consumption: retail sales have been rising for the fifth consecutive month, and families are not only spending more in shops but are also travelling more. In the first five months of the year, domestic accommodations registered 13.7 million guest nights, nearly 9 per cent more than in the same period of the previous year.

The increasing consumer confidence is also reflected in the surge of lending, with new household mortgage contracts in the first five months of 2024 growing dynamically, two and a half times compared to the same period of the previous year. Overall, this has a positive impact on domestic demand and, thus, on the performance of the domestic economy, the minister pointed out.

Márton Nagy stressed that the government’s economic policy measures have proven effective and successful: in the first quarter of 2024, the economy restarted, with GDP growing by 1.7 per cent year-on-year and by 0.8 per cent compared to the previous quarter. This places Hungary’s economic performance among the leading ranks in the EU. Low inflation and the resulting increase in demand have significantly contributed to this, the Minister of National Economy concluded.

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