MNB inflation indicators mixed in March, still ʼbroadly unchangedʼ

Food

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Although two of the three inflation indicators used by the National Bank of Hungary (MNB) rose, measures of underlying inflation "did not change significantly from the previous month and continued to stay in the 1.5%-2.0% range," the central bank said in a monthly assessment on Tuesday.

The indicator for core inflation, excluding indirect tax effects, was 1.9% in February, rising from 1.8% the previous month. Of the underlying measures, the indicator for demand-sensitive inflation, which excludes processed foods from core inflation, was 1.5%, edging down from 1.6%, while the indicator for sticky price inflation, which includes items for which retail prices vary, on average, no more than 15% a month, rose from 1.9% to 2.0%.

Hungaryʼs headline CPI slowed to 2.7% year-on-year in March after rising to 2.9%, near the MNBʼs 3% mid-term target, in February, the Central Statistical Office (KSH) said earlier Tuesday. The KSHʼs seasonally adjusted core inflation, which excludes volatile fuel and food prices, was 1.8% year-on-year, unchanged from February. 

"In March, it was mainly changes in the prices of more volatile items with greater sensitivity to cost changes, i.e. food and energy, that had an upward effect on prices," the MNB said. "Households’ inflation expectations have been broadly unchanged in recent months and remained at moderate levels, in line with underlying inflation developments," it added.

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