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April CPI accelerates to 3.9%

Consumer prices were 3.9% higher on average in April 2019 than a year earlier. Significant price rises were measured over the past year for alcoholic beverages and tobacco, as well as food items, according to the latest monthly data from the Central Statistical Office (KSH).

CPI accelerated from 3.7% in the previous month.

In April 2019 compared to April 2018, food prices increased by 5.2%, within which the price of seasonal food items (potatoes, fresh vegetables and fruit) rose 20.3%, flour by 11.2%, and bread by 8.0%. The price of eggs fell 8.5%, milk by 6.2%, and sugar by 3.6%.

The price of alcoholic beverages and tobacco rose by 8.5% on average, within which tobacco prices rose by 12.7%. Consumers paid 3.0% more for services. Motor fuels became 6.9% more expensive.

In April 2019 compared to the preceding month, consumer prices increased by 0.9% on average.

Core inflation, which excludes volatile food and fuel prices, stayed unchanged at a seasonally adjusted 3.8% in March. State news agency MTI noted that 12-month headline inflation was the highest measured since December 2012, while the month-on-month rise was the steepest since January 2012.

CPI harmonized for better comparison with other European Union member states stood at 3.9% in April. Inflation calculated with a basket of goods and services used by pensioners was 3.7%.

In January–April 2019, compared to the first four months of 2018, consumer prices went up by 3.4% on average.

Consumer price data for May 2019 will be published on June 7.

Underlying inflation slips to 3.4%

In a regular monthly analysis released after the publication of the KSH data, the National Bank of Hungary (MNB) attributed the 0.2 percentage-point rise of headline inflation in April mainly to the increase in fuel prices. It noted that the KSHʼs core inflation figure was unchanged after rising for more than six months.

The central bank said its own measure of core inflation excluding indirect tax effects - a bellwether indicator of underlying inflation, MTI noted - dropped 0.1 of a percentage point to 3.4%, mainly due to a decline in tradables prices, particularly in volatile air fares.

The central bankʼs indicator for demand-sensitive inflation, which excludes processed foods from core inflation, stayed at 3.4%.

The indicator for "sticky price" inflation, which includes items for which retail prices vary, on average, by no more than 15% a month, was up 0.1 of a percentage point to 3.7%.

In April 2019, the contribution to inflation of items with greater sensitivity to cost changes, i.e. food and fuel, increased, while that of demand-sensitive products was unchanged relative to the previous month, the central bank said.

The MNB said householdsʼ inflation expectations "remained at moderate levels" in April.

Assessing inflation prospects after a rate-setting meeting on April 30, the MNBʼs Monetary Council said that inflation "will fluctuate around" the 3% central bank target in the coming quarters, while the measure of core inflation excluding indirect tax effects is "expected to continue to rise until the autumn months, and then to decline from the end of 2019."