Hungarian Parliament building

Hungary Inflation January 2024

Hungary: Inflation slides in January

Inflation came in at 3.8% in January, which was down from December’s 5.5% and surprised markets on the downside. January’s reading represented the weakest inflation rate since March 2021. Looking at the details of the release, prices for clothing and footwear fell in January, while prices for food and non-alcoholic beverages rebounded. Meanwhile, housing and energy price growth moderated.

Accordingly, the trend pointed down, with annual average inflation coming in at 15.2% in January (December: 17.1%). Meanwhile, core inflation fell to 6.1% in January, from the previous month’s 7.6%.

Finally, consumer prices increased 0.65% in January over the previous month, contrasting December’s 0.32% fall. January’s figure marked the highest reading since August 2023.

Commenting on the release, ING’s Peter Virovacz and Dávid Szonyi stated:

“Headline inflation has already fallen below the upper limit of the central bank’s tolerance band, i.e. below 4%. However, it would be very premature to declare victory, as favourable base effects have essentially run their course. As a result, we expect inflation to stabilise (or ease slightly) in the coming months and to pick up again, especially in the second half of the year.”

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