MNBʼs underlying inflation indicators edge up, despite July CPI drop

Analysis

jessica fejos

Two indicators of "underlying inflation" edged up, while the third was unchanged in July from the previous month, although the drop in 12-month headline CPI steepened to 0.3%, data published by the National Bank of Hungary (MNB) today show, as reported by Hungarian news agency MTI.

The indicator for core inflation, excluding indirect tax effects, was 1.2% in July, after 1.1% in June. 

The indicator for demand-sensitive inflation, which excludes processed foods from core inflation, was 1.5%, unchanged now for the third month. 

The indicator for "sticky" price inflation, which includes items for which retail prices vary, on average, no more than 15% a month, was up at 1.8% from 1.7% in the previous two months.

Consumer prices were down 0.3% year-on-year in July after dropping 0.2% in both May and June, the Central Statistical Office (KSH) reported Tuesday morning. Seasonally-adjusted core inflation calculated by the KSH stood at 1.3% in July, up 0.1 of a percentage point compared to the previous month. The KSH said January-July consumer prices were up 0.1% year-on-year.

The indicators were hardly changed and continue to point to a subdued inflationary environment, the MNB said. Inflationary expectations have not changed and continue to be in line with low inflation processes, it added.

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