Hungary: Inflation falls to lowest level since February 2021 in March
Inflation came in at 3.6% in March, down from February’s 3.7%. March’s result represented the lowest inflation rate since February 2021. Looking at the details of the release, housing and energy prices rose at a quicker pace in March compared to the previous month, while price pressures for food and non-alcoholic beverages dropped.
Accordingly, the trend pointed down, with annual average inflation coming in at 11.7% in March (February: 13.4%). Meanwhile, core inflation fell to 4.4% in March, from the previous month’s 5.1%.
Finally, consumer prices rose 0.79% in March over the previous month, picking up from February’s 0.67% rise. March’s uptick marked the highest reading since March 2023.
Commenting on the outlook, ING’s Peter Virovacz and Dávid Szonyi stated:
“It is challenging to make accurate projections for the second half of the year. The Hungarian economy appears weak while labour market tightness has eased, potentially slowing the favourable wage growth process. The cautionary motive of households persists, with the gross savings rate still being at historically elevated levels. In this regard, a significant rebound in consumption is yet to be seen, and all of these factors are therefore likely to provide a headwind to inflation in the coming months.”