Hungary: Inflation remains strong amid higher food prices
December 10, 2010
In November, consumer prices added 0.3% over the previous month, which came in a notch below last month's price increase. As in October, the most important driver behind the monthly price hike was higher food prices (+1.1% month-on-month). As a result of the monthly reading, annual inflation remained unchanged at 4.2%, which matched market expectations. Seasonally adjusted annual core inflation, which does not consider volatile items such as food and fuel, inched up from 1.8% in October to 1.9%. In contrast, harmonised inflation dropped from 4.3% in October to 4.0%. Currently, the Central Bank anticipates inflation will continue above its medium-term target of 3.0% in the coming years. In fact, in its latest inflation report from November, the Central Bank raised its inflation expectations for this year from 3.6% to 4.9%, while for 2011 the Bank sees inflation ending the year at 4.0%.