Far from target: life has become more expensive since July

Annual inflation in Hungary was 16.4 percent in August, the Central Statistical Office (KSH) said on Friday.

Food prices were 19.5 percent higher in August, down from 23.1 percent in the previous month, while household energy prices increased by 34.7 percent.

Prices in the category of goods that includes vehicle fuel rose by 19.8 percent.

Prices of spirits and tobacco products increased by 12.7 percent. Service prices were 13.2 percent up, slowing from a 14.6 percent rise in July.

Harmonised CPI, adjusted for better comparison with other European Union member states, was 14.2 percent.

Core inflation, which excludes volatile fuel and food prices, was 15.2 percent.

Month on month, consumer prices edged up 0.7 percent.

Commenting on the data, Márton Nagy, the minister of economic development, said the drop in prices over the past seven months had been largely thanks to government measures such as mandatory price cuts and the online price monitor, and food inflation below 20 percent was a “milestone” considering its peak of 44.8 percent in December.

Such measures were still effective in suppressing prices, he said, adding that price competition was now “deadly”.

The slightly higher August inflation 0.4 percentage points above the government forecast was down to high fuel prices, he said.

The price of vehicle fuels has risen significantly, and the reasons why were both international and country-specific, he said in a ministry statement, noting decisions by Russia and Saudi Arabia to cut production as well as higher transit fees.

The minister underlined the government’s target of cutting inflation to single digits by year-end, though, he added, this would “not happen in October”.

Hungary’s trade surplus was EUR 697 million in July, down from EUR 1.568 billion in June, the Central Statistical Office (KSH) said in a first reading of data on Friday.

Exports rose by 4.3 percent year on year, to 11.372 billion euros. Imports fell by 12.9 percent, to EUR 10.675 billion.

Trade with other European Union member states accounted for 76 percent of Hungary’s exports and 72 percent of its imports during the month.

In January-July, Hungary’s exports increased by an annual 10.6 percent, to 88.820 billion euros, while imports edged down by 0.8 percent, to 83.761 billion euros. The trade surplus was EUR 5.060 billion.

Source: MTI