Hungary’s consumer price inflation slows to 1.8% y/y in July.

By bne IntelliNews August 14, 2013

Hungary's annual consumer price growth eased to 1.8% in July 2013 from 1.9% in June, the statistics office said. The reading was below market expectations for a 2% growth, according to a poll by Bloomberg. On a monthly basis, consumer prices in the country decreased by 0.3% after rising 0.2% in the previous month.

The annual growth in food prices decelerated to 2.8% in July from 4.1% in June. Prices of alcohol beverages and tobacco products rose by 8.6% y/y, after a 8.8% y/y hike the month before. Costs of services advanced by 3.5 % y/y in July, slower than June’s 4% y/y increase. Prices of motor fuels were up by 1.7% y/y in July.

By contrast, prices in the group of electricity, gas and other fuels declined by 8.8% y/y, with costs of natural gas and electricity decreasing by 7.4% y/y, while those of purchased heat dropping even faster - by 10% y/y. Prices of consumer durable goods extended their downward trend, dropping 2.1% on the year, reflecting continued weak household demand. Prices of clothing and footwear edged down by 0.2% y/y.

The Hungarian central bank cut the key rate by 0.25pps in each of the last twelve months to 4% as of July 23. The Monetary Council considers that the base rate could be lowered further but in smaller steps, by 10bps instead of 25bps. The bottom of the monetary policy easing could be at 3.00-3.50%. The central bank also intends to give forward guidance based on three factors: medium-term inflation outlook, financial stability considerations and assessment of the real economy.

Consumer prices, % y/y              
  Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13
TOTAL  3.7 2.8 2.2 1.7 1.8 1.9 1.8
Food 5.8 4.1 3.4 3.4 3.7 4.1 2.8
Alcoholic beverages, tobacco 13.1 14.8 11.7 10.8 9.8 8.8 8.6
Clothing and Footwear  0.8 -0.4 -0.4 0.4 -0.2 -0.1 -0.2
Consumer durable goods -2.1 -2.3 -2.2 -1.9 -1.8 -1.7 -2.1
Electricity, gas and other fuels 2.4 -7.7 -8.1 -8.4 -8.5 -8.7 -8.8
Other goods incl. motor fuels and lubricants 1.3 2.6 1.5 -0.5 -0.7 0.1 1.7
Services  3.1 3.5 3.8 3.6 4.1 4.0 3.5
Source: KSH              

Related Articles

Hungarian opposition parties seek explanation for secret admission of asylum seekers

Despite its all-out attacks on the EU’s refugee quotas, Viktor Orban's government secretly gave permission for the admission of the same number of asylum seekers to the country in 2017 as ... more

Hungarian president sets date for parliamentary election

President Janos Ader has set April 8 as the date of Hungary's general election, it was announced on January 11. This is the earliest possible Sunday that the ballot can be held under the law. The ... more

Hungarian government backtracks from collecting fines from opposition parties before election

The Economy Ministry on January 10 asked the tax authority to delay collecting fines from opposition parties imposed by the state auditor ASZ to ensure that their pre-election budgets and campaign ... more