Hungary’s consumer prices edge down 0.1% y/y in April, defying expectations for slight growth

By bne IntelliNews May 14, 2014

Hungary's consumer prices edged down by 0.1% y/y in April 2014, after rising by 0.1% the month before, data by the statistics office showed. This is the first time the country posts a negative inflation rate. The reading came as a surprise for the market, which expected a 0.2% y/y growth in April. On a monthly basis, consumer prices in the country ticked higher by 0.1%, following a 0.2% m/m hike in March.

As in the previous months, the reading in April was largely due to the government's decision in November 2013 to cut utility prices resulting in a 10.3% y/y drop in prices of electricity, gas and other fuels. Food prices dropped by 0.5% y/y in April, deepening from a 0.1% y/y decrease in the previous month. Similarly, prices of clothing and footwear dropped by 1.4% y/y, after falling 0.4% y/y in March. Prices of consumer durable goods extended their downward trend, falling by 0.5% on the year in April, reflecting continued weak household demand. Prices of motor fuels decreased by 0.6% y/y.

On the other hand, prices of alcohol beverages and tobacco products rose by 7.3% y/y, easing from a 7.9% y/y hike in March. Costs of services advanced by 1.6% y/y in April, slower that the 1.8% y/y increase a month earlier.

Consumer prices, % y/y            
  Mar-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14
TOTAL  2.8 0.4 0.0 0.1 0.1 -0.1
Food 4.1 0.1 -0.2 0.0 -0.1 -0.5
Alcoholic beverages, tobacco 14.8 12.0 10.5 8.1 7.9 7.3
Clothing and Footwear  -0.4 -1.1 -0.4 -0.2 -0.4 -1.4
Consumer durable goods -2.3 -1.6 -0.8 -0.6 -0.2 -0.5
Electricity, gas and other fuels -7.7 -17.7 -16.9 -10.3 10.0 10.3
Other goods incl. motor fuels and lubricants 2.6 0.9 -0.6 -1.5 -1.1 -0.6
Services  3.5 3.7 3.1 2.1 1.8 1.6
Source: KSH            
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