Hungary: Inflation drops to 1-year low but exceeds Central Bank's target
January 15, 2013
In December, consumer prices remained flat over the previous month, which was above the 0.1% decrease seen in November but below market expectations of a 0.2% increase. According to the statistical office, lower prices for motor fuels and durable goods offset higher prices for services and utilities.
Annual headline inflation fell from 5.2% in November to 5.0% in December, the lowest level in a year and below market expectations of a 5.2% rate. Despite the moderation, inflation closed the year above the Central Bank's inflation target of 3.0% with a 1.0 percentage point tolerance margin. Meanwhile, the seasonally adjusted core inflation index, which excludes volatile items such as fresh food and fuel, added 0.1% over the previous month. Annual core inflation fell from 5.1% in November to 4.9%.
In its latest inflation report from December, the Central Bank projects inflation to end 2013 at 3.3% before moderating to 3.1% by the end of 2014.