Hungary's consumer prices increased by 0.2% y/y in August 2014, accelerating slightly from a 0.1% y/y rise in the previous month, data by the statistics office showed. The reading was in line with market expectations since analysts polled by portfolio.hu expected a growth of between 0.2-0.3% y/y in the month.

On a monthly basis, consumer prices in the country declined by 0.2% in August, reversing from a 0.2% rise in July.

Food prices edged down by 0.1% y/y in August, softening from a 0.4% drop the month before. Similarly, prices of consumer durable goods dropped by 0.2% y/y, following a 0.4% fall in July. The decline, although at a slower pace, signals for continued weak household demand. Prices of clothing and footwear extended their downward trend, falling by 0.3% on the year in August. Cost of motor fuels fell by 0.2% y/y as well.

On the other hand, prices of alcohol beverages and tobacco products rose by 6.4% y/y in August, slightly slower than in July when they grew by 7.1% y/y. Costs of services advanced by 2.7% y/y.

The government's decision to cut household gas prices by 6.5% as of April 1 continued to determine the deflationary effect. Prices of electricity, gas and other fuels fell 12% y/y in August, declining at the same pace as in the previous month.