Budapest, August 9 (MTI) – Consumer prices in Hungary fell by an annual 0.3 percent in July on lower vehicle fuel and household energy prices, the Central Statistical Office (KSH) said on Tuesday.
Analysts had expected headline CPI to be around or slightly under zero because of low fuel prices and base effects.
The twelve-month CPI was negative 0.2 percent in both May and June.
Food prices rose by 0.2 percent after dropping 0.4 percent, in June. The price of alcohol and tobacco products was up by 1.8 percent. Clothing prices increased by 0.9 percent and the price of consumer durables was up by 0.2 percent. The price of services continued to increase at the fastest pace, by 1.3 percent. These increases were offset by a 0.1 percent decline in household energy prices and a 4.9 percent drop in the category of “other goods” which includes vehicle fuel. Vehicle fuel prices alone were down by an annual 13.0 percent.
In a month-on-month comparison, consumer prices dropped 0.2 percent in July, after rising by 0.2 percent in June. Food prices fell by 0.4 percent, as seasonal food prices dropped 5.5 percent. The price of “other goods” fell by 0.9 percent as vehicle fuel prices dropped 2.2 percent. Clothing prices slipped 2.3 percent on summer clearance sales, and the price of consumer durables was down by 0.2 percent. Household energy prices were unchanged. The price of tobacco and alcohol edged up 0.2 percent and service prices rose by 0.6 percent.
Seasonally-adjusted core inflation, which excludes volatile fuel and food prices, was 1.3 percent in a year-on-year comparison and rose by 0.1 percent month-on-month.
CPI calculated with a consumer basket of goods and services used by pensioners was 0 percent year-on-year and down by 0.2 percent month-on-month.
Excluding the effect of tax changes, headline CPI was down by 0.2 percent both in a year-on-year and month-on-month comparison.
In January-July, consumer prices were up by an annual 0.1 percent.
Speaking on public television after the release of the data, deputy state secretary László Balogh said low global oil prices as well as a reduction in the VAT rate on pork to 5 percent from 27 percent at the start of the year had kept prices down. If the trend continues, average annual CPI could reach 0.4 percent, in line with the projection in Hungary’s Convergence Programme, he added.
CIB Bank analyst Sándor Jobbágy put average annual inflation at around 0.5 percent for this year.
Gergely Suppán of Takarékbank projected annual average inflation of 0.6 percent as the year-end inflation rate climbs to 2 percent. Low core inflation suggests wage rises are not creating inflationary pressure, he added.