Hungaryʼs annualized consumer price index (CPI) stood at 2.8% in September 2019, falling under the 3% target of the National Bank of Hungary (MNB) for the first time since January. The central bank attributed the drop in headline inflation mainly to a drop in prices of unprocessed food and fuel.
Annualized CPI dropped from 3.1% in August. The headline September figure was lifted by a 5.1% rise in food prices and an 8.4% increase in prices of alcoholic beverages and tobacco products, while prices in the category of goods which includes vehicle fuel dropped 1.0% as vehicle fuel prices declined 4.6%.
Clothing prices edged up 0.6%, household energy prices increased 0.7%, and consumer durable prices fell 1.4%. Services were up 3.4%.
Harmonized for better comparison with other EU Member States, Hungaryʼs annualized CPI was 2.9% in September. Core inflation, which excludes volatile food and fuel prices, was a seasonally adjusted 3.9%, while CPI calculated with a basket of goods and services used by pensioners was 3.1%.
Excluding the impact of tax changes, consumer prices rose 2.7%.
In a month-on-month comparison, consumer prices were up 0.1% in September compared to August.
Consumer prices were up 3.3% in January-September 2019, compared to the first nine months of 2018.
In its customary monthly analysis released after the publication of the KSH data, the MNB attributed the drop in headline inflation mainly to a drop in the price index for unprocessed food and fuel. Core inflation was lifted to 3.9% in September, from 3.7% in August, mainly by a rise in the price index of market services, the MNB said.
The central bankʼs measure of core inflation excluding indirect tax effects - which state news agency MTI describes as a bellwether indicator of underlying inflation - was 3.4% in September, climbing from 3.2% in the previous month.
After its monthly rate-setting meeting in September, MNB policy-makers said core inflation excluding indirect tax effects "is expected to rise slightly, before decreasing to 3% along a lower than previously expected path, due to external disinflationary effects."
The MNBʼs monthly analysis shows that its indicator for demand-sensitive inflation, which excludes processed foods from core inflation, stood at 3.1%, rising from 2.9% in the previous month. The indicator for "sticky price" inflation, which includes items for which retail prices vary, on average, by no more than 15% a month, was unchanged at 3.4%.
The MNB said householdsʼ inflation expectations "remained moderate... at a level consistent with the 3% inflation target" in September.
Consumer price data for October will be published on November 8.