Inflation rise reflects increased fuel prices, says MNB

Analysis

In a monthly analysis released after the publication of inflation data from the Central Statistical Office (KSH), the National Bank of Hungary (MNB) said the rise in inflation in February reflected an increase in fuel prices in a release on its website.

The central bank reiterated that pricing decisions have shown "higher volatility" and "an unusual seasonal pattern" since the onset of the pandemic, but said disinflationary effects have been strengthening since September, and repricing was below the level seen in 2020 in the first months of 2021.

The MNB's measure of core inflation excluding indirect tax effects, a bellwether indicator of underlying inflation, fell to 3.4% in February from 3.5% in the previous month.

The central bank's indicator for demand-sensitive inflation, which excludes processed foods from core inflation, was flat at 3.4%. The indicator for sticky price inflation, which includes items for which retail prices vary, on average, no more than 15% a month, fell to 3.8% from 4%.

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