Hungary: Inflation moderates markedly in January
February 15, 2011
In January, consumer prices added 0.7% over the previous month. The print came in slightly above December's 0.4% price rise but nearly at half the 1.4% increase tallied in January 2010. As a result, annual inflation plummeted from 4.7% in December to 4.0%, below market expectations that had inflation at 4.3%. HICP inflation followed suit and dropped from 4.6% to 4.0%. According to the Central Statistics Office (KSH), the monthly reading was the result of higher prices for food (+1.9% month-on-month) that were partly offset by lower prices for clothing (-3.0% mom). Meanwhile, seasonally adjusted core inflation, which excludes volatile items such as food and fuel, added a more subdued 0.1% over the previous month, driving annual core inflation to 1.7% (December: 2.0%). In its latest inflation report from November, the Central Bank raised its year-end inflation expectations above the previous 3.0% target to 3.8%.