Hungary inflation up annual 0.9 pc in January

Budapest, February 11 (MTI) – Consumer prices in Hungary rose by an annual 0.9 percent in January, the Central Statistical Office (KSH) said on Thursday.

The rate was level with that in December and under the 1.2 percent estimate by emerging market analysts in London.

Food prices rose by an annual 1.4 percent in January, though pork prices dropped by 17.2 percent as the result of a VAT rate cut on the product from 27 percent to 5 percent from the start of the year.

The price of alcohol and tobacco climbed by 3.5 percent, clothing prices edged up by 0.1 percent and consumer durable prices rose by 2.0 percent. Household energy prices inched down by 0.2 percent and prices in the category of goods that includes vehicle fuel dropped by 1.3 percent.

Harmonised for better comparison with other European Union member states, Hungary’s CPI was 1.1 percent.

Core inflation, which excludes volatile food and fuel prices, was 1.5 percent.

Calculating with a basket of goods and services used by pensioners, CPI was 1.2 percent.

In a month-on-month comparison, prices dropped by 0.1 percent in January. Food prices were up by 0.4 percent and alcohol and tobacco prices climbed by 0.9 percent. Clothing prices slipped 3.0 percent on post-holiday sales, but consumer durable prices edged up by 0.1 percent. Household energy prices were flat, prices in the category of goods that include vehicle fuel dropped by 1.6 percent and service prices increased by 0.3 percent.

The National Bank of Hungary’s “underlying measures of inflation” all rose at an accelerated pace in January, even as headline inflation remained steady, data published by the central bank on Thursday show. The indicator for core inflation, excluding indirect tax effects, was 1.3 percent in January, climbing from 1.1 percent in the previous month. The indicator for demand-sensitive inflation, which excludes processed foods from core inflation, was 1.9 percent, up from 1.5 percent; while the indicator for sticky price inflation, which includes items for which retail prices vary, on average, no more than 15 percent a month, was 2.0 percent, up from 1.7 percent in the previous month.

“The levels of the measures continue to indicate a restrained inflation environment,” the NBH said in a monthly assessment of the inflation data. “Households’ inflation expectations have been broadly unchanged since early 2015, remaining at moderate levels in line with low underlying inflation developments,” the central bank added. It said an increase in fuel prices, which rose on base effects, was countered by a fall in unprocessed food prices supported by a reduction in the VAT rate on pork. The bank also noted the impact of an increase in volatile airline ticket prices on non-durables prices in a month-on-month comparison. It attributed the month-on-month increase in service prices to higher insurance premiums.

Source: http://mtva.hu/hu/hungary-matters