The success of the stock market and the economy cannot be separated from each other, said Mihály Varga at the press conference evaluating the year 2025 of the Hungarian stock market. The President of the Magyar Nemzeti Bank (MNB) recalled André Kosztolányi’s idea that “the stock market requires imagination and patience”. The central bank governor added to this the role of stability and trust.
“The past few years have shown that those who saw fantasy in the Hungarian stock market were not wrong, because the returns have confirmed this. In the year 2025, the Hungarian stock market has produced growth of around 30 percent, which is outstanding even in international comparison.”
Mihály Varga emphasized.
According to the central bank’s evaluation, the rise of the BUX index above 110,000 points is not merely a technical record, but a sign that the Hungarian stock market remains one of the dominant financial centers of the region – only the Polish stock market’s growth is ahead of the Hungarian one. Mihály Varga emphasized: the strongest companies are indeed displayed in the “showcase” of the stock exchange, but behind them is the wide circle of entrepreneurs that gives the performance of the entire Hungarian economy. Therefore, according to him, stock market successes are not the results of a narrow elite, but the surface symptoms of a deeper economic process.
The president of the central bank also recalled that
the BÉT has grown more than a hundredfold over the past 35 years, giving investors an average annual return of 14 percent.
He called this not a one-time rise, but a long-term trend. The continuation of the BÉT50 program is also considered crucial because not only companies already on the stock exchange should be supported, but also those that may enter the public market in the coming years. “Going to the stock market is not only a leap in financing, but also in organization and efficiency, which improves the competitiveness of the entire corporate sector,” the central bank president pointed out.
The money is there, but it’s not working yet
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According to the Central Bank’s calculations, Hungarian households currently have around HUF 24 thousand billion in cash or demand deposits.
This amount is greater than the total market value of listed companies. According to Mihály Varga, this is a huge potential that is currently underutilized. Only 3 percent of the financial wealth of the Hungarian population is invested in stocks, while the savings rate is around 5-7 percent of GDP, which is considered high even at the European level.
The aim of the central bank is for a greater part of household savings to find its way to the capital market, because this would simultaneously strengthen the financing of the economy and increase the wealth of households. However, this requires a stable environment – that is why monetary policy has received special emphasis. According to Mihály Varga, inflation has been brought below the central bank’s tolerance band, i.e. 4 percent, and there is a realistic chance of reaching the 3 percent target at the beginning of 2026. The exchange rate of the forint moved in a narrow range, strengthening from 410 to around 385, which created a favorable environment for savers.
Those who saved in forints in 2025 did well
– highlighted the central bank governor, adding: they intend to continue to maintain this policy.
The foreign exchange reserve rose to a record level of 50.2 billion euros, which means financial stability and security. The central bank sees the banking system as capital strong and liquid, which enables investments to revive and lending conditions to improve. „Together, all of this creates a macroeconomic background in which the growth of the stock market is not separated from reality, but is built on it,” stressed Mihály Varga.
The market is not only soaring, but also deepening
The CEO of the Budapest Stock Exchange (BSE) interpreted the role of the capital market in a European context. Referring to the Draghi report, Tibor Tóth emphasized that “without a strong capital market, there is no strong economy, and until Europe offers sufficiently attractive opportunities, savings will flow to America.” On the other hand, according to him, the Hungarian capital market is no longer a follower, but an initiator.
The BUX index showed a 40 percent increase in 2025, while the US S&P 500 rose barely 18 percent. After crossing the 100,000 level in the summer, the indicator rose above 115,000 points by the end of the year. According to Tibor Tóth, this is not a consequence of the performance of a few large companies, which was supported by the 44 percent increase in BUMIX. The liquidity of the market has also increased:
the average daily turnover exceeded HUF 18 billion, which represented a 50 percent increase in one year, and is also considered outstanding at the regional level.
The CEO highlighted several transactions that showed that the Hungarian market is already capable of conducting large-volume transactions. MBH Bank’s share issue, Shopper Park’s euro-based issue, EXIM’s several hundred billion bond program and several companies – for example, the hallmark of Balogh Petya STRT – its category change all indicate that the market is deepening, not just rising. He called it particularly important that there are about five hundred companies in the stock market’s moon court that could be ready for a public appearance. These companies are typically more efficient and competitive than average.
“Today, the Hungarian stock market not only offers returns to investors, but also gives the entire economy a development path. Without a strong capital market, there is no strong, competitive economy,” said Tibor Tóth, who called this not a slogan, but an empirical experience.
The question is no longer whether it works
The evaluations of the central bank and stock exchange managers converged on one point: that the Hungarian stock exchange is no longer an experimental field, but an institutionalized economic force. The challenge now is not whether it will continue to grow, but how much household and corporate savings can enter this system. According to the numbers, the money is there, the yield is there, the conditions for stability are also given – the decision is in the hands of the actors.
In this sense, 2026 may not be the year of records, but of consolidation: deciding whether the Hungarian stock market will remain a playground for a narrow circle of investors or become a real social institution. The signs point to the latter. And if fantasy is accompanied by patience and trust, then the Hungarian capital market can not only remain strong, but also become more and more decisive.
When will the interest rate cut come?
On Tuesday, inflation data for December and 2025 will be released – the latter may be around 4.5 percent. The consumer price index already entered the central bank’s tolerance band in November, so the Index asked Mihály Varga whether this could put pressure on the national bank to reduce the base interest rate, and when and under what conditions it could open the way for a possible interest rate cut.
The Governor of the Central Bank said:
Decision-making will remain strictly data-driven, and there will be no relaxation until inflation is not only within the tolerance band, but also permanently close to the 3 percent target, while the stability of the forint and the preservation of financial confidence are also considered primary considerations.
He did not specify a specific date for when interest rates could be cut – the market is forecasting two cuts of 25 basis points each in 2026.
Mihály Varga, in response to the international uncertainties – the change in American policy, geopolitical tensions and energy market risks – said that the central bank constantly monitors the external environment and a special analytical capacity monitors international influences, but the uncertainty alone does not justify panic-like actions.
To Index’s question about the introduction of the euro, he answered that the goal is not the rapid adoption of the euro itself, but the fulfillment of those conditions – low deficit, decreasing public debt, stable growth, low inflation – which in themselves strengthen the economy.
In response to questions about the fiscal path, he said that the government is committed to reducing the deficit and debt, and the central bank supports this with a stability-oriented monetary policy, because a predictable interest rate environment and price stability create more favorable conditions not only for investors, but also for the public finances.
(Cover photo: Mihály Varga on December 13, 2023. Photo: Kata Németh / Index)
