Hungary’s economy: trade surplus EUR 755 m in May, CPI negative 0.2 pc in June – UPDATE

Budapest, July 8 (MTI) – Hungary’s trade surplus came to 755 million euros in May, a first reading of data released by the Central Statistical Office (KSH) on Friday shows. Consumer prices in Hungary fell by an annual 0.2 percent in June.

Hungary trade surplus EUR 755 m in May

The surplus expanded by 284 million euros from the same period a year earlier.

Exports measured according to value in euros grew by an annual 6.3 percent to 7.610 billion euros in May. Imports were up by 2.4 percent at 6.855 billion euros.

Fully 81 percent of exports went to other European Union member states. A total of 77 percent of imports came from the EU.

In the first five months of the year, the trade surplus was 4.204 billion euros, up by 720 million euros from the same period a year earlier. Exports rose by 3.2 percent to 38.253 billion euros and imports increased by 1.4 percent to 34.049 billion euros.

Gergely Suppán of Takarékbank said export growth could continue for the rest of the year, supported by slow but steady economic growth in the European Union and the fast growth of car sales. The Brexit sitaution is likely to act as a drag on export growth, but with international oil prices lower the trade surplus for the year should be above 8.9 billion euros, he added.

Analyst at K and H Bank Dávid Németh said he expected the trade surplus for the year to reach a new record and for the current-account surplus to grow. A pickup in industrial production in April is likely to continue in the coming months and exports should rise by 5-6 percent every month during this time, he added.

Hungary CPI negative 0.2 pc in June

Analysts had forecast headline inflation at around or slightly below zero for June.

In a month-on-month comparison, consumer prices climbed by 0.2 percent in June.

KSH department chief Borbála Minary said that while food prices had risen in June due to seasonal effects, fuel prices fell from a year earlier.

In a year-on-year comparison food prices edged down by 0.4 percent in June while the price of alcohol and tobacco products was up 1.9 percent. In a monthly comparison food prices fell by 0.5 percent while the price of alcohol and tobacco products was unchanged

Seasonally-adjusted core inflation, which excludes volatile fuel and food prices, was up 1.2 percent in a annual comparison and up 0.1 percent month on month.

In January-June, consumer prices were up 0.1pc from the same period a year earlier.

Analysts interviewed by MTI said there is still no inflationary pressure in the economy.

Sándor Jobbágy of CIB Bank said a negative twelve-month price index was still possible in July but inflation should gradually accelerate from then on to exceed 1 percent by the end of the year. He forecast full-year average inflation of about 0.6 percent. Gergely Suppán of Takarékbank projected 0.7 percent CPI on average for the whole year. Gergely Urmossy of Erste Bank forecast average inflation at 0.6 percent for the full year 2016.

Source: MTI