In its monthly assessment, the National Bank of Hungary (MNB) said its measures of underlying inflation rose slightly in June compared to the previous month but remained in the 2-2.5% range, national news agency MTI reported Tuesday.
As reported earlier in the day, annual inflation was 3.1% in June 2018, a 0.3 percentage-point increase on the previous month.
Core inflation stood unchanged at 2.4%, while core inflation adjusted for the effects of indirect taxes was up 0.1 of a percentage point to 2.3%.
According to the projection in the MNBʼs June Inflation Report, inflation has temporarily risen slightly above 3% driven by the sharp increase in oil prices. Nevertheless, it added, the 3% inflation target will be achieved in a sustainable manner by mid-2019.
The MNBʼs indicator for demand-sensitive inflation, which excludes processed foods from core inflation, rose from 2.0% to 2.1%.
The indicator for sticky price inflation, which includes items for which retail prices vary, on average, by no more than 15% a month, rose from 2.2% to 2.4%.
Householdsʼ inflation expectations "remained at moderate levels" during the month, the central bank said.
Cited by MTI, Péter Virovácz, lead analyst at ING Bank, said inflation could rise higher than 3% over the summer, as the MNB expects. The weakening of the forint and higher oil prices pose a risk, he added, although inflation could still average 2.8% for the entire year.
Gergely Suppan of TakarékBank said inflation could be around 2.7% for the year, as the tempo of price rises decelerates by December. Inflation could fluctuate around 3% next year and average 2.8% for the year as a whole, he added.
K&H Bank chief analyst Dávid Németh noted how fuels and tobacco products had pushed inflation higher in June, adding that without these products inflation would have been unchanged from the 2.8% rate recorded in May. He predicted that CPI could be above 3% for the rest of the year and reach 3.3-3.4% by December, but concurred that it should still average 2.8% for the year as a whole.