Harmonized inflation declines in April

Latest reading: Harmonized inflation fell to 3.9% in April from March’s 4.2%, marking the weakest inflation rate since December 2024. Looking at the details of the release, prices for transportation dropped for the first time in six months amid declining oil prices. That said, food and non-alcoholic beverages costs increased at a faster pace, keeping inflation above the 2024 average. The trend pointed up mildly, with annual average harmonized inflation edging up to 3.4% in April (March: 3.3%). Meanwhile, consumer price inflation fell to 3.7% in April from the previous month’s 4.0%. Lastly, harmonized consumer prices increased 0.09% in April over the previous month, below March’s 0.28% rise.

Panelist insight: Commenting on the outlook, Marin Kocis, analyst at Erste Bank, stated: “This year's increase in prices is broadly distributed across various groups of goods and services, driven by the higher value-added tax (VAT) introduced as part of the consolidation package. A gradual pass-through of higher VAT and increased costs (e.g., the financial transactions tax) into consumer prices is still expected. An important factor influencing the development of inflation this year is the energy price cap reintroduced by the government, which has helped push inflation down while complicating consolidation efforts. In the months ahead, we anticipate a slight acceleration in year-on-year price growth.”

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