Here’s the inflation data for Hungary – but here’s the big surprise!

In September, consumer prices in Hungary increased by 3.4% compared to the same period last year, which is a big surprise. Analysts interviewed by the Portfolio expected that price pressures would not subside and we could see a rate similar to 3.9% in August. No analyst expected the price increase rate to be this low, with forecasts ranging from 3.8 to 4%. Therefore, the upward trend in inflation appears to have broken.

The good news is that core inflation has also fallen dramatically, with the index falling from 4.7% in August to 4%. This also suggests that there are no strong price increases in the economy as we have seen in recent months.

The CSO measured a decline in prices for nearly all product groups compared to August, just one month after companies completed significant revaluations – price increases – that were related to the persistently weak forint exchange rate (and weakening) and the difficult situation due to the epidemic. companies were forced to pass their costs on to consumers, allowing demand to remain relatively stable.

Inflation data for September also puts Magyar Nemzeti Bank in a more comfortable position. In September, the MNB was forced to raise its one-week deposit rate by 15 basis points after inflation rose sharply and the forint approached its all-time low set in the spring. With inflation data significantly lower than expected, the issue of further raising short-term interest rates is likely to be removed from the MNB chart. At 10 o’clock, inflation data from the MNB will also be available, presumably also indicating a relief from price pressures.

In 12 months compared to September 2019:

• Food prices increased 7.3%, including seasonal foods (potatoes, fresh vegetables, national and southern fresh fruits combined) 18.5, Paris, sausages 17.0, sugar 11.7, flour 11, 0, salami, chorizo ​​and ham were 10.1% higher and those with eggs 9.1% higher.
• The prices of alcoholic beverages and tobacco increased by 6.3% on average, of which tobacco products by 9.6%.
• Services had to be paid 2.4% more and vehicle fuels 3.4% less.

In 1 month, compared to August 2020:

• Consumer prices fell an average of 0.4%. Food prices also fell 0.4%, mainly as a result of a 3.8% fall in food prices with seasonal prices (potatoes, fresh vegetables, fresh domestic and southern fruit combined). In general, the prices of non-seasonal food products were unchanged, as flour was 2.7, dry pasta 1.8% more expensive, chocolate and cocoa 1.6, milk 0.9 and poultry 0.5% cheaper . .
• Services had to be paid 0.9% less, mainly due to a 6.9% drop in prices for holiday services and a 1.5% drop in telephone and internet prices.
• The prices of alcoholic beverages and tobacco products decreased by 0.2% on average, of which spirits decreased by 0.5%. Garments rose in price by 0.7%. The price of vehicle fuels increased 0.5%.

Cover image: Shutterstock