Never was inflation this high in Hungary in the last 14 years
Consumer prices in Hungary grew by an annual 7.4 percent in November, after hitting 6.5 percent in October, the Central Statistical Office (KSH) said on Wednesday.
Prices in the category of goods that includes vehicle fuel increased by an annual 15.1 percent, as vehicle fuel prices jumped 37.7 percent, spirits and tobacco prices rose by 11 percent, lifted by a 16.8 percent increase in tobacco prices.
Food prices grew by 6 percent, while household energy prices edged 0.9 percent higher. Consumer durables increased by 6.6 percent, clothing prices by 1.8 percent, and services by 4.6 percent.
Harmonised for better comparison with other European Union member states, CPI was 7.5 percent.
Core inflation, which excludes volatile food and fuel prices, was 5.3 percent.
Month on month, inflation notched up 0.7 percent.
Inflation is at the highest level in years and well beyond the Hungarian central bank’s 2-4 percent tolerance band.
Analysts told MTI said that inflation may have reached its peak in November, though the process of curbing it would take a long time.
ING Bank’s Péter Virovácz said higher prices were seen in 129 out of 140 product groups monitored by KSH, and he noted the “extremely rapid” rise in fuel prices and service charges as factors driving inflation. With sustained supply-demand mismatches, the situation was likely to endure in the next few months, he added. It was “almost certain”, Virovacz said, that inflation would remain above 7 percent in December and “well above 6 percent” in the first quarter of 2022. The base rate, he added, was likely to be at least 4.25 percent by mid-year.
Gergely Suppán of Takarékbank said the
central bank may need to speed up its cycle of rate hikes to combat secondary effects of higher commodity prices, a boom in demand amid the economy emerging from the pandemic, as well as a jump in wages due to the labour shortage.
The government’s cap on fuel prices did not show up in the November data, he noted, adding that the cap may reduce inflation in the next few months to a small degree, though soaring gas prices could have “unforeseeable” consequences. Takarékbank’s has changed its inflation forecast from 5 percent to 5.1 percent this year, and from 4.7 percent to 5 percent in 2022 with upward risks, Suppán said.
K and H Bank’s Dávid Németh said that inflation could reach 5 percent for the full year and 4.8 percent next year. By the end of 2022, annual inflation could slow to 3.5 percent, he said.
Gábor Regős of Századvég Economic Research said that
K and H Bank’s Dávid Németh said that inflation could reach 5 percent for the full year and 4.8 percent next year. By the end of 2022, annual inflation could slow to 3.5 percent, he said.
Gábor Regős of Századvég Economic Research said that
higher fuel prices accounted for over 2 percentage points of the current inflation figure, adding that putting a cap on fuels could somewhat slow down inflation in December.
External factors such as a shortage of commodities contributed to higher inflation, though internal causes such as high demand and a weak forint were also dominant factors. He said that he expected further monetary tightening but “not at a faster pace” than before.
Erste Bank analyst János Nagy said meeting the government’s inflation target “could take longer than previously expected”. Higher energy prices do not impact retail utility prices yet, but
“the business sector is not yet protected”
and this may drive up consumer prices in the end. He noted that several sectors such as food production and construction projected price hikes of at least 10-20 percent, adding that “an expansive fiscal policy in the next few months” also posed “risks for price dynamics”.
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Source: MTI
The Governor of The Central Bank of Hungary – Gyorgy Matolcsy, who, as previously recommended, when he SPEAKS – the Government and the Citizens of Hungary – should LISTEN & Act.
In his recomendations, comments and explanations – dated 07/11/2021 – under article title in DNH = “Governor of Hungary’s Central Bank : Budapest small in the World, to Big for Hungary” – Matolcsy explains the “troubled waters” that will lie ahead to Hungary, if it does nor Rebalance & Restructure internally, and that Hungary, as a Country, won’t keep pace with the Regions Economic Developement.
In the month that has transpired since this article – the Forint has continued to decline against ALL other Major and Global Currencies.
This article – highlights AGAIN – that Inflation in Hungary will continue to greater new high’s than we are seeing at present.
Employed numbers have lost that steady – Upward Trend – we have witnessed over the past 4 – 6 months- and look “vulnurable” that they will hold current leval of Employment figures in Hungary.
Un-employment numbers latest published – give indication they are SOFT – and on the rise AGAIN.
Gross Domestic Product – the expectations of the present Government – lacks Factuality – and will not reach 9% but likely “mean” to 4% to 5% – for the current financial year.
Interest Rates – the main principal componetary of the Economic & Financial Broadsheet Landscape of the Hungarian economy – the main players of indicators – ALL point – that Interest Rates like Inflation – will continue to RISE.
Globally interest rates are – WOBBLY – just holding current rate levals – and personally, I expect them, like Hungary – that they will start to move in an upward trend – within the next (3) to (6) six months.
Rebalance & Restructure – the “trimming” of Government spending – that focuses on NEEDS – and not Wants.///
Gyorgy Matolcsy – when he SPEAKS – Government and the Citizens of Hungary – Should Listen.
Finally reality is starting to sink in. We are heading straight for dragflation … inflation going to skyrocket and the economy is going to taaaaaaaank and the beauty of it all is this is but the beginning. Wait till the market tanks too, then we will really see the chickens coming home to roost. “You will own NOTHING and you will be HAPPY”