{
  "title": "Hungary: Selected Issues",
  "publication": "IMF Staff Country Reports, February 3, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2023/02/02/hungary-selected-issues-529093",
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  "summary": "This Selected Issues paper examines how and why Hungary reached historically high inflation. Particular attention is placed on cross-country comparisons to understand where Hungary may stand out, and on domestic drivers that could help explain stronger inflationary pressure in Hungary.",
  "sections": [
    {
      "heading": "Overview and scope",
      "content": "- Publication date: February 3, 2023\n- Pages: 46\n- Issue: 071\n- Series: Country Report No. 2023/071\n- Volume: 2023\n- DOI: https://doi.org/10.5089/9798400231506.002\n- Stock No: 1HUNEA2023002\n- ISBN: 9798400231506\n- ISSN: 1934-7685\n- Format: IMF Staff Country Reports"
    },
    {
      "heading": "Main analytical focus",
      "content": "- Examines how and why Hungary reached historically high inflation.\n- Places particular attention on cross-country comparisons to understand where Hungary may stand out.\n- Focus on domestic drivers that could help explain stronger inflationary pressure in Hungary.\n- Methodology highlights:\n  - Overview of inflation developments over the last two years.\n  - Use of an augmented Phillips Curve to estimate the impact of common drivers of inflation.\n  - Examination of the role of labor market tightness and policy stances.\n  - Analysis of possible changes to the degree of exchange rate pass through in recent years.\n- Outcome: exploration of risks to the inflation outlook and policy recommendations drawn from the findings."
    },
    {
      "heading": "Key findings and dynamics",
      "content": "- Inflation has reached historically high levels in Hungary (documented across the analysis).\n- Core findings highlight:\n  - Inflation expectations are de-anchored.\n  - Core inflation dynamics remain strong.\n  - A tight labor market is contributing to persistent domestic inflationary pressures.\n  - The lag-effect of prior loose monetary and fiscal policies has boosted domestic demand, reinforcing inflation.\n- Empirical strategy includes estimating impacts of common inflation drivers via an augmented Phillips Curve and assessing exchange rate pass-through changes."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Despite recent tightening, both monetary and fiscal policies need to be consistently and persistently tight to return inflation to the central bank’s target.\n- Policy mix recommendation:\n  - Maintain a consistently and persistently tight overall policy mix.\n  - Address de-anchored inflation expectations and strong core inflation dynamics by sustaining restrictive settings until convergence toward the inflation target is achieved."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject areas: Asset and liability management, Central bank policy rate, Central banks, Financial institutions, Financial services, Inflation, International organization, Liquidity, Monetary operations, Monetary policy, Mortgages, Prices\n- Keywords: B. inflation driver, Central bank policy rate, Europe, food inflation, Global, Inflation, inflation in Hungary, Liquidity, Monetary operations, monetary policy stance, Mortgages, policy stance indicator, producer price inflation\n\nInternational Monetary Fund. Hungary: Selected Issues, IMF Staff Country Reports 2023, 071 (2023).\n\n---\n\n Content in this bundle\n\n- Hungary: Selected Issues; IMF Country Report No. 23/71; January 17, 2023\n  - Hungary: Selected Issues; IMF Country Report No. 23/71; January 17, 2023 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Hungary: Selected Issues; IMF Country Report No. 23/71; January 17, 2023 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: February 3, 2023",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400231506.002",
    "Publication date: February 3, 2023",
    "Pages: 46",
    "Issue: 071",
    "Series: Country Report No. 2023/071",
    "Volume: 2023",
    "DOI: https://doi.org/10.5089/9798400231506.002",
    "Stock No: 1HUNEA2023002",
    "ISBN: 9798400231506",
    "ISSN: 1934-7685",
    "Format: IMF Staff Country Reports",
    "Examines how and why Hungary reached historically high inflation.",
    "Places particular attention on cross-country comparisons to understand where Hungary may stand out.",
    "Focus on domestic drivers that could help explain stronger inflationary pressure in Hungary.",
    "Methodology highlights:",
    "Outcome: exploration of risks to the inflation outlook and policy recommendations drawn from the findings.",
    "Core findings highlight:",
    "Empirical strategy includes estimating impacts of common inflation drivers via an augmented Phillips Curve and assessing exchange rate pass-through changes.",
    "Despite recent tightening, both monetary and fiscal policies need to be consistently and persistently tight to return inflation to the central bank’s target.",
    "Policy mix recommendation:",
    "Subject areas: Asset and liability management, Central bank policy rate, Central banks, Financial institutions, Financial services, Inflation, International organization, Liquidity, Monetary operations, Monetary policy, Mortgages, Prices",
    "Keywords: B. inflation driver, Central bank policy rate, Europe, food inflation, Global, Inflation, inflation in Hungary, Liquidity, Monetary operations, monetary policy stance, Mortgages, policy stance indicator, producer price inflation",
    "**Hungary: Selected Issues; IMF Country Report No. 23/71; January 17, 2023**"
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