Hungary: Inflation falls to lowest level on record
January 15, 2014
In December 2013, consumer prices fell 0.5% over the previous month according to the statistical office. December's figure, which was below the 0.1% decrease recorded in November, was mainly the result of a decrease in prices for housing, water, electricity, gas and other fuels as well as for food and non-alcoholic beverages.
Annual headline inflation fell from 0.9% in November to 0.4% in December, which is the lowest rate on record. Inflation remains well below the Central Bank's target of 3.0% with a tolerance margin of plus/minus 1.0%. The core inflation index, which excludes volatile items such as fresh food and fuel, rose 0.1% over the previous month (November: +0.4% month-on-month). Meanwhile, annual core inflation inched up from 3.5% in November to 3.6% in December.
The Central Bank projected that inflation would end 2014 at 1.9% and increase to 3.0% by the end of 2015. FocusEconomics panelists see year-end inflation at 2.4%, which is down 0.2 percentage points over last month's projection. Next year, the panel expects inflation to inch up to 3.2%.
Author: Dirina Mançellari, Senior Economist