Annual inflation in Hungary was 3.1 percent in February

Annual inflation in Hungary was 3.1 percent in February, the Central Statistical Office (KSH) said on Tuesday.

Inflation grew at a higher rate than 2.7 percent registered in January, with higher tobacco prices due to excise tax increases putting upward pressure on the index. The price of tobacco products jumped by 16.5 percent, while spirits and tobacco increased by 9.9 percent.

Prices in the category of goods that includes vehicle fuel increased by 2.7 percent, while vehicle fuel prices were up 4.6 percent. Food prices increased by 3.4 percent and the price of services rose by 1.7 percent.

Household energy prices edged up by 0.3 percent, consumer durable prices increased by 3.8 percent and clothing prices fell by 1.6 percent.

Adjusted for better comparison with other European Union member states, CPI stood at 3.3 percent.

Core inflation, which excludes volatile food and fuel prices, was 4.1 percent.

Inflation calculated using a basket of goods and services used by pensioners was 3.2 percent.

In a month-on-month comparison, consumer prices rose by 0.7 percent.

Hungary budget deficit EUR 1.46bn in Jan-Feb

Analysts told MTI that inflation in February matched forecasts and a further uptick was likely on the back of rising fuel prices and the higher excise tax.

Gergely Suppán of Takarékbank said he expected March inflation to push above 4 percent, citing the excise tax hike among other factors. Meanwhile, fuel prices jumping from a low base would help to drive inflation to above 5 percent in April, he said.

ING lead analyst Péter Virovácz said that after a cramped supply side due to the third wave of the coronavirus, the struggle to meet pent-up demand once the country reopens would drive prices even higher.