As of July 20, 2023, predictions indicate that EU inflation is set to decrease to 7-8% by December. This marks a significant drop from the 20.1% recorded in June. For Hungary, this development is particularly positive as the country has been grappling with high inflation rates. To address this issue, the Hungarian government has implemented various measures. These include increasing interest rates and imposing price controls on specific goods in an attempt to curb inflation. However, these efforts have had limited success so far.
The anticipated deceleration in inflation can be attributed to several factors. Among them is the alleviation of supply chain disruptions and a decline in energy prices. Furthermore, the European Central Bank (ECB) is expected to raise interest rates in the coming months. This move is likely to temper demand and bring inflation closer to its target of 2%.
Recent EU data from May 2023 reveals that inflation stood at 6.1%, down from 7.0% in April. This marks the first time since November 2022 that the inflation rate has dipped below 7%. Despite this positive trend, inflation is still projected to remain above the ECB’s 2% target in the upcoming months.
While inflation is experiencing a slowdown across Europe, it remains higher than desired. The ECB is committed to further increasing interest rates as part of their efforts to steer inflation back to the targeted 2%. However, the timeframe for achieving this objective remains uncertain.
