Consumer prices in Hungary rose 3.5% in June from the same month a year earlier, slowing from a 3.9% increase in May, the Central Statistics Office (KSH) said on Wednesday.

Consumer prices fell 0.2% from the previous month after rising 0.2% a month in May.

Twelve-month inflation was lower than analyst estimates as both Hungarian analysts and emerging market analysts in London put the June rate at 3.8%.

Prices fell on the month due to a drop in food, including seasonal food prices, and falling vehicle fuel and consumer durable prices.

Seasonally-adjusted core inflation, which excludes volatile food and fuel prices, picked up in June rising 3% yr/yr and 0.3% month-on-month after a 2.7% yr/yr and 0.2% monthly increase in May.

Consumer prices in the first six months rose 4.1% from a year earlier. Twelve-month CPI rose from 4% in January to peak at 4.7% in April before it started to slow.

The monthly drop in the headline index in June resulted from a 1% drop in food prices ─ the first such drop since last September ─ pushed down by 9.2% lower seasonal food prices. Vehicle fuel prices fell by 1.1% a month after a 0.3% drop in May, and consumer durable prices fell 0.4%, more than they did in May. Summer sales pushed clothing prices 0.6% down from the previous month.

The few month-on-month increases were registered with services, rising 0.3%, spirits and tobacco and household energy, both up 0.2%.

Service prices rose 0.3% or more each month of 2011.

Food prices rose 6.7% yr/yr, still well above the average, but slower than the 8.6% increase in May, as seasonal food-stuff prices were 4.3% lower than a year earlier. Prices in the category that includes vehicle fuels rose 5.3% in twelve months, including a 12% rise in fuel prices and a 3.6% rise in pharmaceuticals prices. Household energy prices rose 3.6% yr/yr. Despite the monthly drop, clothing prices were still 4.9% higher in June than one year earlier.

Although rising steadily on the month, service prices were up by a below-average 2.1% yr/yr after a 1.9% yr/yr rise in May. A 1.3% drop in consumer durable prices and a 0.9% drop in spirits and tobacco prices helped to the twelve-month headline index slow.

Hungary’s CPI harmonized with the other European Union member states was up 3.5% on the year and dropped 0.2% as the Hungarian index did, slowing from 3.9% year-on-year and up 0.2% month-on-month.

Excluding tax changes, consumer prices rose 3.4% in the 12 months to June and fell 0.2% from May.

CPI for pensioners climbed 3.9% yr/yr and dropped 0.3% on the month, slowing from a 4.6% yr/yr and a 0.3% m/m rise in May.