Hungary: Inflation comes in at highest level since October 2012 in September
Consumer prices increased 0.20% over the previous month in September, stable from August’s reading. September’s rise came on the back of higher prices for food, clothing and footwear and consumer durables.
Inflation increased to 5.5% in September, following August’s 4.9%. September’s reading represented the highest inflation rate since October 2012. Meanwhile, the trend pointed up slightly, with annual average inflation coming in at 4.0% in September (August: 3.9%). Lastly, core inflation rose to 4.0% in September, from August’s 3.6%.
Commenting on the release, Peter Virovacz, Hungary senior economist at ING, stated:
“The September inflation reading was in line with the market consensus, but it is higher than the NBH’s forecast published in September (5.5% vs 5.2-5.3%). As a result, we see an increased risk that inflation over 2021-2022 will be higher than outlined in the September Inflation Report. This would also mean further delays in reaching the inflation target without changing the central bank’s underlying rate hike path. According to the latest official communication, the rate hike cycle will continue in the next couple of months with 15bp steps. However, today’s data may force the NBH to change tempo again, this time increasing it. A stronger rate hike might be needed to anchor inflation expectations and to avoid second-round effects.”