Hungary’s consumer price inflation speeds up to 1.9% y/y in June

By bne IntelliNews July 12, 2013

Hungary's annual consumer price growth speeded up to 1.9% in June 2013 from 1.8% in May, the statistics office said. The reading was a touch below market expectations. On a monthly basis, consumer prices in the country increased by 0.2% after edging down 0.1% in the previous month.

The growth in food prices speeded up to 4.1% in June from 3.7% y/y in May. Prices of alcohol beverages and tobacco products rose by 8.8% y/y after a 9.8% y/y growth the month before. Costs of services advanced by 4 % y/y in May. Prices of motor fuels edged up 0.1% y/y in June.

By contrast, prices in the group of electricity, gas and other fuels declined by 8.7% y/y, with costs of natural gas and electricity decreasing by 10% y/y, while those of purchased heat dropping even faster - by 11.7% y/y. Consumer durable goods extended their downward trend, dropping 1.7% on the year, reflecting continued weak household demand. Prices of clothing and footwear dropped by 0.2% y/y as well.

The Hungarian central bank eased its monetary policy, cutting the key rate by 0.25pps in each of the last eleven months to 4.25% as of June 25. The Monetary Council considered that inflation fell below the central bank’s inflation target already at the beginning of 2013 due to reduced utilities prices and the strong downward pressure stemming from subdued demand. The bank will consider a further reduction of interest rates if the medium-term outlook for inflation remains in line with the bank’s 3% target and the improvement in financial market sentiment is sustained.

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

Related Articles

Hungary's electric sports aircraft maker expands production

Hungary's Magnus Aircraft is constructing a new manufacturing plant in southern Hungary near the regional Pecs-Pogany airport to meet rising demand for its unique aircraft and plans to finish ... more

Gyorgy Waberer to list logistics company BILK on Budapest bourse

Gyorgy Waberer, the former owner of haulage company Waberer, plans to list shares of Budapest logistics terminal BILK on the Budapest Stock Exchange in June, local media reported on May 28. “I ... more

Hungary reaches deal with Gazprom on 2019 gas deliveries

Hungary has reached an agreement with Russian gas giant Gazprom on the volume and price of next year's gas deliveries and negotiations have begun on gas deliveries for 2020, Foreign Minister Peter ... more