The currency has strengthened to near five-year highs, while annual inflation slowed to 1.2% in July, its lowest level since late 2016. Consumer confidence also improved, with GKI’s consumer-confidence index rising to 1.6 in July, its highest level since 2018. The turnaround follows expectations of better relations with the European Union. In May, Brussels agreed to release or make available up to €16.4 billion in previously frozen recovery and cohesion funds, subject in part to further reforms by Magyar’s government. Major challenges remain. The European Commission forecasts a budget deficit of 6.2% of GDP this year, while projecting growth of 1.8% in 2026 and 2.1% in 2027.