Hungary Inflation


Hungary: Consumer prices record steep drop in November

December 11, 2014

In November, consumer prices fell 0.4% over the previous month, which followed the 0.3% drop observed in October. The figure represented the steepest drop in 11 months. The fall reflected that lower prices for food products as well as for electricity, gas and other fuels more than offset higher prices for clothing and footwear as well as for alcoholic beverages and tobacco.

In annual terms, consumer prices dropped 0.7% in November, which followed the 0.4% drop observed in the previous month and represented the steepest decline on record. As a consequence, annual inflation fell further below the Central Bank’s target of 3.0%, with a tolerance margin of plus/minus 1.0%. Core consumer prices, which exclude volatile items such as fresh food and fuel, rose 0.2% over the previous month, matching October’s result. Meanwhile, annual core inflation inched down from 1.5% in October to 1.2% in November.

In its December inflation report, the Central Bank projects that inflation will be 0.9% on average in 2015. For 2016, it sees inflation averaging 2.9%. FocusEconomics panelists see inflation averaging 1.9% in 2015, which is down 0.1 percentage points from last month’s projection. For 2016, the panel expects inflation to rise to 2.9%.

Author: Teresa Kersting, Economist

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