September inflation slows to 1.6% in Hungary

According to the flash report published by the Hungarian Central Statistical Office (HCSO) on 7 October, consumer prices in September 2026 were on average 1.6% higher than a year earlier. Even more striking is that, based on the authority’s data, food prices overall became 1.3% cheaper over the year.

Following the favourable figures, the retailers’ interest group is already urging the phase-out of the retail margin cap introduced for food. We have gathered which products saw the biggest price falls, what nevertheless pushed up the monthly indicator, and what shoppers can expect if the price regulation is removed.

What do the September inflation figures show?

According to the HCSO, alongside the annual 1.6% price increase, prices rose by 0.2% compared with the previous month. The annual and monthly figures measure two different things: the former shows how much more expensive or cheaper something is compared with a year earlier, while the latter reflects the change from August to September.

The figure was also more favourable than market expectations. According to a report by Portfolio, analysts had on average expected inflation of 1.8%. In the outlet’s assessment, inflation will not exceed the central bank’s inflation target in the coming months either – but this is an analyst forecast, not a hard data point.

According to an analysis by the Oeconomus Economic Research Foundation, the September figure remained comfortably below the National Bank of Hungary’s 2–4% tolerance band, while core inflation stabilised at 1.9%. The tolerance band is not the same as the central bank target itself: the target is a specific inflation level, while the band is the surrounding range within which the central bank still considers deviations acceptable.

Core inflation is an indicator calculated without the most volatile items, such as energy and some food products, so it gives a better signal of more persistent price trends.

Where did food prices fall the most?

According to HCSO data, food prices fell by 1.3% year on year. Excluding catering services from the calculation, the authority says the price decline was 4.6%. The difference shows that shop-bought products became cheaper, while restaurant spending and consumption at other catering venues did not follow the same movement.

According to the statistical office’s flash report, the biggest price falls over one year were measured in these product groups:

• canned meat: –26.7%;
• butter: –15.6%;
• fresh domestic and tropical fruit: –14.4%;
• pork: –11.0%;
• cheese: –10.2%.

These are national averages, so actual prices on the shelf in any given shop may differ. The direction is clear, however: for several staple products that regularly appear in household baskets, such as dairy, meat and fruit, the average price is noticeably lower than a year earlier. We wrote about what the previous month’s figures showed in our article on the August inflation data.

Why did monthly inflation still rise?

If food became cheaper, the question arises: what caused the 0.2% monthly increase? According to the HCSO, monthly inflation was driven mainly by motor fuels, which became 5.9% more expensive in a single month.

The other persistent pressure comes from services: according to the authority’s data, their prices rose by 4.9% year on year. Households may therefore feel a double effect: they pay less for some products in the shop, but more for refuelling and various services.

Retail margin cap: why is its future disputed?

The retail margin cap is a state intervention affecting food products that limits the margin retailers can apply to the products concerned. After the September figures, the question has once again come to the fore of whether it is still needed.

According to a report by Telex, the National Trade Association (OKSZ) is advocating the phase-out of the retail margin cap, while Mfor wrote about similar proposals from economic chambers and professional organisations. The essence of their argument is that, alongside persistently low inflation, there is no longer any reason to regulate prices.

The assessment of the regulation, however, is divided. According to Mfor’s article, professional critics believe the retail margin cap distorted how the market operates, put smaller shops and domestic suppliers in a difficult position, and also contributed to higher imports. By contrast, the Oeconomus analysis concluded that, together with international factors, the retail margin cap made a meaningful contribution to curbing food inflation.

It is important to stress that, for now, these are proposals from interest groups and professional opinions. The precise timetable and method of any phase-out are not known, so at present there is no date shoppers need to plan around.

Could grocery shopping become more expensive if the retail margin cap ends?

According to retailers – based on Telex’s report – the phase-out would not cause any serious price rise, because there is already strong price competition between shops. However, this is the assessment of the parties concerned, not an independent forecast.

At present, it cannot be said reliably whether there will be a corrective price increase for previously regulated products and, if so, how large it might be. It is possible that the price of some products will remain unchanged, that others will rise, and that shops will follow different strategies. In the average inflation indicator, such an effect would only become visible later, in the data for the coming months.

What is worth watching when shopping?

Based on the September data, several staple products – including butter, cheese, pork and fresh fruit – are on average cheaper than a year earlier, so it may be worth comparing prices between different shops. If the retail margin cap ends, it may be especially useful to track the price of a few regularly purchased products for a while, because that makes it easier to notice if a particular shop raises prices.

Inflation data show a national average, and the increase or decrease in the cost of your own basket may differ from that. This article is general information and does not constitute financial advice.