The inflation in Hungary is unstoppable!

Hungary’s consumer price index rose by an annual 8.3 percent in February, a high not last seen since August 2007, and up from 7.9 percent in the previous month, the Central Statistical Office (KSH) said on Wednesday.

Analysts had forecast inflation of 8.1 percent. Month on month, consumer prices increased by 1.1 percent in February.

Fuel and food prices were the main drivers of inflation.

Food prices increased by an annual 11.3 percent, vehicle fuel prices by 18.7 percent, while alcoholic beverages and tobacco prices rose by 8.2 percent.

The National Bank of Hungary food and industrial goods prices drove the February data, while core inflation was fueled by processed food, industrial goods and services. Fuel prices contributed 1.3 percentage points to headline inflation, the analysis shows. The NBH pointed to a “higher pace of repricing”, driven by higher global commodity and energy prices manifesting “quickly and across a wide range of product groups”.

It noted that a temporary government rollback of prices for some staples from February had “restrained the increase in food prices”.

The NBH’s measure of core inflation excluding indirect tax effects rose to 8.1 percent in February from 7.4 percent in the previous month. The NBH said the indicators measuring households’ inflation expectations “showed unusually high volatility”.

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Meanwhile, Márton Nagy, the prime minister’s chief economic advisor, told MTI that government price caps had reduced headline inflation by 3-4 percentage points.

Nagy said Hungary’s February inflation was “mid-field” among European Union member states. Prices rose at a faster clip in Lithuania, Estonia, Belgium and Latvia, and CPI is expected to be over Hungary’s in Poland and the Czech Republic, too, he added.

He said the impact of government price caps on food and vehicle fuel become more pronounced in February and March as global energy and grain prices rose. He estimated that Hungary’s regulated utilities price scheme for households cut headline CPI by 1.5-2 percentage points, while temporary caps on vehicle fuel prices and some staple foods shaved off “close to 1 percentage point” and 0.8-1.0 percentage point, respectively.

He warned that sanctions on Russia could translate as a “significant loss” for the Hungarian economy, raising energy and food prices further.