Hungary consumer prices climbs to 2.8 pc in May

Consumer prices in Hungary rose by an annual 2.8 percent in May, the Central Statistical Office (KSH) said on Friday.

In a month-on-month comparison, prices were up by 0.6 percent.

The headline figure accelerated from 2.3 percent in April.

Annual CPI harmonised for better comparison with other European Union member states stood at 2.9 percent.

Seasonally-adjusted core inflation, which excludes volatile fuel and food prices, was at 2.4 percent.

Calculating with a basket of goods and services used by pensioners, inflation was 2.6 percent.

In a monthly analysis released after the publication of the KSH data, the National Bank of Hungary said its measures of underlying inflation developments were “effectively unchanged from April”. “The measures continued to be at or around 2 percent and remained below the level of core inflation,” it added.

The indicator for core inflation excluding the effects of indirect taxes stood at 2.2 percent in May, unchanged from the previous month.

The indicator for demand-sensitive inflation, which excludes processed foods from core inflation rose to 2.0 percent from 1.9 percent.

Households‘ inflation expectations “remained at moderate levels” during the month, the central bank said.

Senior analyst Péter Virovácz of ING Bank noted that the May CPI came close to the central bank’s target for the first time since February last year while core inflation remained unchanged at 2.4 percent. Therefore, the central bank is not expected to consider this a sustained rise in inflation. Virovacz said the rise in fuel prices alone account for 0.5 percentage point of the increase in the headline figure while price rises of food, spirits and tobacco slowed down slightly.

ING’s analysts predict 2.6 percent average inflation in 2018.

Gergely Suppán of Takarekbank forecast 2.7 percent average inflation this year.

Source: MTI