Hungary: Inflation drops to eight-month low
July 12, 2011
In June, consumer prices dropped 0.2% over the previous month, which contrasted the 0.2% price increase observed in May. The unexpected monthly price drop was a result of falling prices for food products (-1.0% month-on-month) as well as for clothing and footwear (-0.6% mom), mainly reflecting a drop in fuel prices. Owing to the subdued monthly print, annual inflation fell from 3.9% in May to 3.5% in June, which was well below market expectations that had inflation remaining at 3.9%. Meanwhile, seasonally adjusted core inflation, which excludes volatile items such as food and fuel, accelerated from 2.7% in May to 3.0%. In its latest inflation report from June, the Central Bank projects inflation to end the year at 3.9%, which is above the 3.0% inflation target.