ADVERTISEMENT

Analysts: CPI downturn surprising, no deflation risk

Figures

Hungary’s consumer price inflation unexpectedly weakened in October after rising in the previous month, latest data showed Tuesday. The consumer price inflation slowed to 0.9% in October from 1.4% in September, the Central Statistics Office (KSH) reported yesterday.

In August, the inflation rate was 1.3%. Twelve-month consumer price inflation fell to its lowest level since 0.6% measured in February 1974 as a government-initiated cut in utilities prices was helped by steeply lower fuel prices.

Food prices grew 1.1% y.o.y., weaker than the 1.7% rise seen a month earlier. Clothing and footwear prices dropped 1.4%, and consumer durable goods prices fell by 1.9%. Costs of electricity, gas and other fuels were lower by 8.9% than in October 2012.

On a monthly basis, the consumer price index declined 0.3%. Hungary’s harmonized index of consumer prices (HICP), moved up 1.1% annually in October. Month-on-month, the HICP decreased by 0.3%.

Poll, Barclays: Sustained deflation no serious risk
Hungary’s consumer inflation collapsed to a four-decade low largely on the back of tame food price pressures and the higher retail margins failing to feed through to tobacco prices, but sustained deflation is still not a pronounced risk, London-based emerging markets economists said after the release on Tuesday of a much lower-than-expected CPI data for October.

Year-on-year headline inflation eased to 0.9% last month after a 1.4% print in September.

Forecasts in an Econews survey had varied in a narrow 1.2% to 1.4% range. William Jackson, senior emerging markets economist at Capital Economics, a major London-based global financial consultancy, stressed after the data release that core inflation still remains relatively high at 3.4% year-on-year.

On a similar note, Daniel Hewitt, chief emerging markets economist at Barclays, said he expects the National Bank of Hungary (MNB) to continue to cut rates by 20bp per month, reaching 3.00% at the end of 2013. “We also expect another cut in 2014 to 2.80% and we do not rule out further cuts depending on financial market conditions,” he added.

ADVERTISEMENT

Rate-setters augur slower decline in CPI in 2022 Analysis

Rate-setters augur slower decline in CPI in 2022

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

The strongest move - Morgan Stanley Hungary head and Chess F... Podcasts

The strongest move - Morgan Stanley Hungary head and Chess F...

ITM, capital gov't agree on support for public transport City

ITM, capital gov't agree on support for public transport

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.