Hungary inflation falls below psychological barrier

Annual inflation in Hungary was 3.8 percent in January, the Central Statistical Office (KSH) said on Friday. Month on month, prices rose by 0.7 percent.

Food prices increased by 3.6 percent, while household energy prices went down by 11.3 percent. Services prices were up 10.4 percent, while consumer durables fell by 1.4 percent.

Commenting on the data, Minister for National Economy Marton Nagy said in a statement that inflation no longer presented a significant problem from the point of view of the economy, and the 3.8 percent annual inflation reported for January was better than the relevant figures in Estonia (5.0 percent), Croatia (4.8 percent), Austria (4.3 percent) or Slovakia (4.3 percent). Nagy added that real wages had started rising again since September, and real wage growth could reach or even exceed 6 percent this year.

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After bringing down inflation, the government will now focus on “the main task of 2024” which is restoring economic growth, the minister said. In order to achieve GDP growth of around 4 percent, he said progress must be made in three areas: the activity rate of the labour market must be boosted, the level of investments must be maintained above 25 percent, and household consumption must be restored by strengthening consumer confidence.