Higher inflation is global, not local, phenomenon - KSH

Analysis

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Higher inflation is not "country-specific" or unique to Hungary, but a "global phenomenon", the deputy chairman of the Central Statistical Office (KSH) said after the release of January CPI on Friday, according to a report by state news wire MTI.

László Windisch, who was earlier a deputy governor of the National Bank of Hungary (MNB), said January CPI was around 12% in Estonia and Lithuania, and reached over 8% in Belgium and Slovakia. Hungary's CPI was close to levels in the Netherlands and Latvia in January, he added.

The 0.5-percentage-point increase in Hungary's CPI compared to December puts the country in "the mid-range" in European comparison, Windisch said, noting CPI rose by as much as 3.4 percentage points in Slovakia and 1.9 percentage points in Belgium.

He said annual adjustments to the composition of the consumer basket, including bigger weights for spending on catering, vehicle fuel, and cigarettes, and reduced weights for spending on household energy and food purchases in supermarkets, did not impact the scale of the overall price rise in January. Without the adjustments, headline CPI would still have been 7.9%, he added.

Windisch said higher food prices "played a big role" in January CPI, adding that the impact of the government's price cap on a number of staple foods, introduced on February 1, would only show up in February CPI.

He acknowledged feed-through of higher global energy prices to goods and services, but said Hungarian households are shielded from the direct impact of higher energy prices by the country's regulated retail utilities pricing scheme.

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