Analysis: Central Banks and Governments in Eastern Europe at Odds Amid Inflation

Analysis: Central Banks and Governments in Eastern Europe at Odds Amid Inflation
People walk in a shopping street as shops reopen amid the coronavirus disease (COVID-19) pandemic in downtown Budapest, Hungary on April 7, 2021. Bernadett Szabo/Reuters
Reuters
Updated:

BUDAPEST—A surge in price growth in eastern Europe has opened a rift between central banks that have launched rate hikes to battle inflation and populist governments trying to defend a strong economic recovery.

The standoff is most apparent in Hungary and the Czech Republic, where national elections have complicated the task of central banks, which have led the way in the European Union in monetary tightening. Both have raised their key rates by more than a percentage point since June.