Hungary: Inflation ends the year above expectations
January 14, 2011
In December, consumer prices climbed 0.4% over the previous month. The reading came in a notch above last month's 0.3% price increase, but well above the flat reading tallied in December 2009. As a result, annual inflation jumped from 4.2% in November to 4.7%, exceeding market expectations that inflation would reach 4.5%. Harmonised inflation followed suit and rose from 4.0% to 4.6%. The most important drivers behind December's price rise were higher fuel prices (+4.3% month-on-month) as well as increased prices for clothing and footwear (+1.0% mom). Moreover, as in previous months, inflation was also fanned by above-average food prices. Consequently, seasonally adjusted core inflation, which excludes volatile items such as food and fuel, added a more subdued 0.2% over the previous month, driving annual core inflation to 2.0%. In its latest inflation report from November, the Central Bank raised year-end inflation expectations above its 3.0% target to 3.8 %.