Consumer prices in Hungary rose by 2.7 percent year-on-year in December, continuing to slow after an acceleration that lasted for much of the year.
Headline CPI slowed from 3.1 percent in November, 3.8 percent in October and 3.6 percent in September, all over the National Bank of Hungary‘s 3.0 percent mid-term target for “price stability”.
Average annual inflation reached 2.8 percent for 2018.
December CPI was lifted by a 5.2 percent rise in the price of spirits and tobacco and a 4.7 percent increase in food prices. Household energy prices were up by 1.2 percent, consumer durable prices edged up by 0.5 percent, clothing prices increased by 0.7 percent and prices in the category of goods which includes vehicle fuel climbed 1.5 percent. Service prices increased by 2.3 percent.
CPI harmonised for better comparison with other European Union member states stood at 2.8 percent.
Core inflation, which excludes volatile food and fuel prices, was also 2.8 percent.
CPI calculated with a basket of goods and services used by pensioners was 2.8 percent, too.
In a month-on-month comparison, CPI edged down 0.3 percent in December as the price of vehicle fuel dropped 6.9 percent.
ING Bank chief analyst Péter Virovácz noted that core inflation had risen by 0.2 percentage point to 2.8 percent in December, reaching its highest level since 2014. This clearly shows inflationary pressure building in the economy, he added.
Takarekbank analyst Gergely Suppán said core inflation could reach the 3 percent threshold and remain there this year. Low imported inflation, as well as a reduction in the tax burden for businesses, could slow the rise in inflation, he added.
Photo: Daily News Hungary – Alpár Kató