Hungary Inflation


Hungary: Consumer prices register steepest decline on record

October 10, 2014

In September, consumer prices fell 0.2% over the previous month, mirroring August’s reading. The fall reflected that a decrease in prices for food, consumer durable goods and services more than offset higher prices for clothing and footwear.

In annual terms, consumer prices dropped 0.5% in September (August: +0.2% year-on-year), which represented the largest drop on record and came in below market expectations of a 0.3% decline. As a consequence, annual inflation moved 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, fell 0.3% over the previous month (August: +0.1 month-on-month). Meanwhile, annual core inflation declined from 2.4% in August to 1.4% in September, which marked the lowest rate since July 2010.

The Central Bank projects that inflation will be 0.1% at the end of 2014 and then increase to 2.5% at the end of 2015. FocusEconomics panelists’ projection is not in line with the Central Bank’s forecast as the panel sees 2014 year-end inflation at 0.2%, which is unchanged from last month’s projection. Next year, the panel expects inflation to rise to 2.3%.

Author: Teresa Kersting, Economist

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Hungary Inflation Chart

Hungary Inflation September 2014 0

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Hungarian Central Statistics Office.

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