CEEMEA Week Ahead MNB to Cut 25bp

Economics Research 21 August 2026 | 4:44PM BST

CEEMEA Week Ahead: MNB to Cut 25bp

In the coming week, there will be an MPC meeting in Hungary on Tuesday. We and Kevin Daly | consensus expect the MNB to cut its policy rate by 25bp to +5.50%, reflecting recent Goldman Sachs International

guidance from the Bank and the Governor, alongside remarkably weak developments in Clemens Grafe | consumer prices in the past months. Goldman Sachs International

Hungary: MNB to Cut 25bp, in Response to Exceptionally Weak Inflation Andrew Matheny | The Monetary Council of the MNB will meet on Tuesday, August 25, and we and Goldman Sachs International

consensus expect it to cut its base rate by 25bp to +5.50%. Following July’s MPC Farouk Soussa | meeting, the Bank continued to strike an explicitly dovish stance, with Governor Goldman Sachs International Mihály Varga reiterating his earlier guidance for the cutting cycle to continue throughout the summer and that the MNB will “revisit the question of the rate path in Ludovica Ambrosino | September” (when the MNB’s forecasts are next updated). We believe the recent Goldman Sachs International developments in consumer prices – with headline inflation falling sharply in July and Basak Edizgil surprising consensus to the downside for a seventh consecutive month – have all but | solidified the move. Goldman Sachs International

Johan Allen Looking beyond the short term, we believe that the outlook for Hungarian rates is | dovish. The Tisza government aims to meet the Maastricht criteria by 2030 and has Goldman Sachs International

committed to Euro adoption – a prospect we believe is realistic. A necessary early step towards meeting the criteria will be to lower the inflation target from +3.0%yoy to the Euro area’s +2.0%yoy. As this is likely to occur before the end of the year, we revised our estimate of the neutral policy rate from +4.00% to +3.00% (significantly below market pricing). While a lower inflation target implies a lower neutral policy rate in the long term, it also implies a more cautious path for monetary policy in the short term. Despite this, we still expect a relatively rapid pace of monetary easing in response to Hungary’s remarkably weak inflation dynamics, with the MNB cutting rates by 25bp at each of the five remaining meetings this year – lowering its policy rate from +5.75% to +4.50% – and to continue cutting next year to the neutral rate of 3.00%.

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Goldman Sachs CEEMEA Week Ahead

Country Time Event Period Consensus Forecast Previous (UK) mom/qoq yoy mom/qoq yoy Monday 24 August Poland 08:30 Retail Sales Jul +4.6%yoy — — — +6.8%yoy Nigeria — GDP 2Q — — — — +3.9%yoy Tuesday 25 August Poland 08:30 Unemployment Jul +5.9% — — +5.8% — Hungary 13:00 Monetary Policy Meeting — +5.5% +5.5% — +5.75% — Wednesday 26 August Russia 17:00 Industrial Production Jul — — — — +0.6%yoy Thursday 27 August Israel 11:00 Manufacturing Production Jun — — — -6.2%mom — Poland 13:00 Minutes of MPC Meeting — — — — — — Friday 28 August Hungary 07:30 Trade Balance Jul — — — +EUR1305m — Czech Republic 08:00 GDP 2Q P +2.0%yoy — — +0.4%qoq +2.0%yoy Türkiye 08:00 Trade Balance Jul — — — -USD10.40b — South Africa 13:00 Monthly Fiscal Data Jul — — — +ZAR80.1b —

Source: Bloomberg, Goldman Sachs Global Investment Research