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MNB: Underlying inflation levels out in August

Analysis

The National Bank of Hungary (MNB) says its measures of underlying inflation were "broadly unchanged" in August compared to the preceding month, according to a monthly assessment released today, reported by Hungarian news agency MTI.

The indicator for core inflation, excluding indirect tax effects, was 1.2% in August, level with the previous month. The indicator for demand-sensitive inflation, which excludes processed foods from core inflation, was 1.4%, slipping from 1.5%; while the indicator for sticky price inflation, which includes items for which retail prices vary, on average, no more than 15% a month, was 1.8%, also unchanged from the previous month. 

"The levels of the measures continue to indicate a moderate inflation environment," the MNB said. "The contribution of demand-sensitive products to inflation was unchanged, while movements in the more volatile items with greater sensitivity to cost changes, i.e. food and energy, continued to have a downward effect on prices," it added.

Householdsʼ inflation expectations "remained at moderate levels, in line with low underlying inflation developments," the MNB said.

Hungary’s consumer price index (CPI) continued dropping in August, following the trend of the past few months, a first release of data published earlier today by the Central Statistical Office (KSH) shows. CPI was down 0.1% on average in August compared to the same month a year earlier, while dropping by 0.4% on average compared to the previous month. 

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