Hungary: Inflation at over eight-year high in April
Consumer prices jumped 0.80% from the previous month in April, following March’s 0.7% increase. April’s figure largely reflected soaring prices for food, clothing and footwear and alcoholic beverages and tobacco.
Inflation jumped to 5.1% in April from March’s 3.7%, marking the strongest rise since November 3.7% and piercing the upper bound of the Central Bank’s target range of 3.0% plus or minus 1.0 percentage point. Meanwhile, the trend moved higher, with annual average inflation coming in at 3.3% from March’s 3.1%. Lastly, core inflation rose to 3.1% from the previous month’s 2.8%.
Commenting on the release, Peter Virovacz, Hungary senior economist at ING, stated:
“he reopening-related inflation is ahead of us and we also expect producer price increases to spill over into consumer prices within the next six months. This could mean that headline inflation will remain above 4% through this year. Today’s inflation reading however won’t change the NBH’s imminent stance. As core inflation is within the tolerance band, the central bank can continue its wait-and-see approach. This could only be challenged by significant sell-side pressures on the forint, in our view. This will pose upside risks to inflation, in addition to the possible second round effects coming from reopening and commodity price shocks.”