NBH sees ‘increasingly pronounced’ inflation decline in second half of 2023
Hungary’s central bank has said it expects a decline in inflation to become “increasingly pronounced” in the second half of 2023 owing to both internal and external factors.
Further, slowing economic growth is set to see a “quick rebound” from July, central bank director András Balatoni said on Thursday, presenting the National Bank of Hungary’s latest quarterly Inflation Report.
The report puts inflation in the 15.0-19.5 range for 2023 following a range of 14.5-14.7 expected this year.
Concerning the external factors contributing to the decline in inflation, Balatoni mentioned the decline in the world market prices of energy and raw materials, the easing of difficulties in production chains and a fall in global food prices and freight costs. As regards internal factors, he noted the slowdown of economic growth, a fall in disposable incomes and consumption as well as the fading of the base effects of tax measures.
He attributed Hungary’s inflation rate of more than 20 percent to energy prices and rising costs. Businesses priced their products well above their costs and corporate profits rose by 34 percent compared with the previous year, he added. Profits are also up in other regions, Balatoni said, but not to the extent that they are in Hungary. He said inflation could “no longer be explained by rising costs”, insisting that businesses had “overcompensated”.
Hungary saw the highest rises in food prices, Balatoni said, noting that they were significantly higher than elsewhere in the region. “The causes behind this massive price increase across a wide variety of products needs to be looked into,” he added.
Processed food prices rose by 25 percent, while unprocessed food inflation was 18 percent, Balatoni said.
Food imports also pushed CPI up, he said, noting that the weakening of the forint was quickly reflected in consumer prices. Market players compensated for the effects of the food price caps, he said, adding that retail sales had even increased rather than decreased. Balatoni said it was questionable as to whether retailers will immediately lower the prices of goods that they had raised once the price caps are scrapped.
He also said that the price caps had increased demand for certain products, which had led to production chain disruptions. He pointed out that as a result of the price caps it had become 25 percent cheaper to buy cheese from Poland, while chicken cost less when imported from Romania.
Meanwhile, he said the economic rebound projected for the second half of next year was based on continued investments and high employment.
Balatoni noted that the central bank puts GDP growth next year at 0.5-1.5 percent and at 3-4 percent in the following years.
Read also12-year negative record: Petrol is the most expensive in Hungary in the region
Source: MTI
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So, according to central bank director Mr. Balatoni “Businesses priced their products well above their costs and corporate profits rose by 34 percent compared with the previous year … Profits are also up in other countries … but not to the extent that they are in Hungary”.
He said inflation could “no longer be explained by rising costs”, insisting that businesses had “overcompensated”.
And then there’s our Politicians, insisting it’s the European Union’s sanctions, Soros lapdogs, Brussels Bureaucrats, Liberal Elite, Biden’s America, etc. Hm.
Mr Balatoni – Director of the Hungarian Central Bank – track record of opinions-forcasts expressed and published, that in the immediate nearness of time, have proven disastrously WRONG, in his making of Finance & Economic statements and the giving passing of comments – relating to what is FACTUAL known, by those of broader knowledge & experience, the continuous pressurized downward trend of the Hungarian economy.
Andras Balatoni – walks a Rickety, Wobbling, Splintering un-stable Wooden Plank – continuing to “give way” in his economic forecasts, on the “depressed” state of the Hungarian Economy.
Andras Balatoni – Stabilization – Sustainability – what is YOUR answer for millions of Hungarians – what is going to occur that will hold to-gether the Hungarian economy that it is able to support & sustain it-self?
Andras Balatoni – inflation figures modules or whatever your opinions are “driven” gained resourced from, your estimates of Inflation for 2023 in Hungary, not forgetting FACTUALLY across the broadness of the Hungarian economy it is running at 42% months end November 2022 and rising, at this present point in time, your 2023 estimates on Inflation – massively WRONG.