CPI to Fall Into Single Digits by Oct - Minister

Analysis

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Hungary's inflation rate could fall into the single digits by October, Gergely Gulyás, the head of the Prime Minister's Office, said at a regular press briefing on Thursday, according to a report by state news wire MTI.

"If everything goes well, inflation will be in the single digits in October," Gulyás said. He added that CPI would fall a monthly "2, 3 or 4" percentage points in the coming months.

He pointed to the impact of measures the government has rolled out to bring down inflation and noted that mandatory discounts supermarkets must offer regularly on a number of food products would be raised from 10% to 15% from August 1. He added that Szép voucher card balances could be used for purchases in supermarkets from August. 

Hungary's CPI rose 20.1% year-on-year in June, falling for the fifth month in a row after peaking at 25.7% in January. The government has pledged to bring inflation down to the single digits by year-end.

Gulyás said the 1.5% GDP growth target in the 2023 budget or "at least 1%" growth "appears realistic".

Addressing European Union proposals on mandatory migrant resettlement quotas, Gulyás said the "good news" was that because of opposition by the Visegrád Group, along with Germany and the Netherlands, the measures wouldn't be pushed through the European Parliament in an expedited procedure, rather talks would continue in September. He added that the proposals would "strengthen migration and result in migrant ghettos".

Hungary has spent HUF 650 bln to defend its border, which is also the EU frontier, and has been reimbursed for less than 1% of those expenditures by Brussels, he said.

Speaking about the suspension of Hungary's EU funding over concerns regarding the rule of law, Gulyás claimed the country had fulfilled conditions related to the judiciary and the matter was no longer an obstacle to transferring the monies from the seven-year budget. Hungary has sent invoices for EUR 238 mln in payouts for 2021-2027 operative programmes of which the EU must cover 85% or EUR 202 mln, he added.

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