Hungary’s consumer price inflation eases to 0.9% y/y in Oct 2013, below expectations.

By bne IntelliNews November 13, 2013

Hungary's annual consumer price growth decelerated to 0.9% in October 2013 from 1.4% in September, the statistics office said. The reading was below market expectations for a 1.3% growth, according to a poll by On a monthly basis, consumer prices in the country decreased by 0.3%, reversing from a 0.5% m/m rise in the previous two months.

The annual growth in food prices eased to 1.1% in October from 1.7% the month before. Prices of alcohol beverages and tobacco products rose by 10.5% y/y, after a 10.9% y/y hike in September. Costs of services advanced by 3.8% y/y in October, faster than the 3.3% y/y increase a month earlier.

By contrast, prices in the group of electricity, gas and other fuels declined by 8.9% y/y, with costs of natural gas, electricity and purchased heat each dropping by 10% y/y. Prices of consumer durable goods extended their downward trend, falling by 1.9% on the year, reflecting continued weak household demand. Prices of clothing and footwear saw a 1.4% y/y fall in October, faster than September’s drop of 0.3% y/y. Prices of motor fuels also decreased by 1.5% y/y.

The Hungarian central bank decided on October 29 to cut the base rate by 20bps to a new historic low of 3.40%. The Monetary Council considers that the bottom of the monetary policy easing could be at 3.00-3.50% and said that further cautious easing of monetary conditions should follow, considering the outlook for inflation and the real economy and taking into account perceptions of the risks associated with the economy. The bank also lowered its forecast for the average annual inflation in 2013 to 2% from 2.1% projected in June.

Consumer prices, % y/y            
  Jan-13 Mar-13 Jul-13 Aug-13 Sep-13 Oct-14
TOTAL  3.7 2.2 1.8 1.3 1.4 0.9
Food 5.8 3.4 2.8 2.7 1.7 1.1
Alcoholic beverages, tobacco 13.1 11.7 8.6 9.1 10.9 10.5
Clothing and Footwear  0.8 -0.4 -0.2 -0.5 -0.3 -1.4
Consumer durable goods -2.1 -2.2 -2.1 -2.2 -1.7 -1.9
Electricity, gas and other fuels 2.4 -8.1 -8.8 -8.7 -8.1 -8.9
Other goods incl. motor fuels and lubricants 1.3 1.5 1.7 0.4 0.0 -1.5
Services  3.1 3.8 3.5 2.9 3.3 3.8
Source: KSH            

Related Articles

Hungarian owners take back ownership of leading e-retailer

The two Hungarian businessmen with minority stakes in Extreme Digital, Hungary's leading electronics retailer, have purchased back 50.4% of its shares from South African company Steinhoff ... more

Finland gives final nod to construction of Nord Stream II

Finland has issued a second and final permit for the construction of the controversial Nord Stream II pipeline that is to pump gas from Russia directly to Germany via a Baltic Sea route, the Regional ... more

Lufthansa's arrival lifts economy of Hungary's second city

Three large German companies have chosen to invest in Debrecen, Hungary's second-largest city, since Lufthansa launched its first direct flight two years ago, it was announced on April 11.  ... ... more