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.
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