According to the country's Minister of Economic Development, Marton Nagy, inflation in Hungary could peak at an annualised rate of between 25% and 27% in January or February.

In addition, inflation next year could come in at 15% - 16%, Nagy stated during a conference in Budapest on Thursday, as reported by state news agency MTI.

Skyrocketing inflation is still a major challenge for Prime Minister Viktor Orban's government, and earlier this week, current price caps on basic foodstuffs were extended until 30th April.

Furthermore, price growth poses a challenge to the country's central bank, Reuters reports, which had to hike interest rates in October to curtail sharp losses in the Forint, despite the economic slowdown.

Headline inflation in Hungary increased to an annual 22.5% last month from October's 21.1% reading, bolstered by rising food and energy prices. Inflation was also forecast to rise further as the government scrapped a price cap on fuel earlier in December.

Back in November, before the fuel price cap came to an end after a year, Hungary's Minister of Economic Development said he forecast inflation to peak at an annual 25% by the end of 2022, the Reuters news agency report goes on to say.

Nagy added that the Hungarian government is aiming for a budget deficit of 3.5% for next year, a reduction from this year's 4.9% deficit. In addition, GDP growth is predicted to decline to 1.5% in 2023 from a forecast of 5% this year.