Analysts blame tax rises, higher energy prices for jump in inflation

Analysts polled by MTI on Wednesday blamed the higher-than-expected rise in consumer prices in September on tax increases made as part of the government's austerity program. Consumer prices increased 5.9% year-on-year in September and were up 2.5% compared to August, the Central Statistics Office (KSH) said early on Wednesday. Raiffeisen Bank's Zoltán Török said increases in centrally-regulated energy prices, the rise in the middle VAT rate from 15% to 20%, and higher excise taxes were the reason for the big jump in inflation. In light of the high September CPI, Török said the central bank would raise rates 50 basis point at its next meeting on October 24. Inter Európa Bank's Csaba Hegedűs said some traders raised prices immediately after, or even before, the VAT rise, which took effect on September 1. He projected a 25 basis point rate rise at the next central bank rate-setting meeting. Both analysts said twelve-month year-end inflation could exceed 6% and put annual average inflation around 4%. CIB Bank's Mariann Trippon also blamed higher prices in September on tax increases which were part of the government's austerity program. She said the National Bank of Hungary would raise rates 25 basis point at their next meeting. (Mti-Eco)