Experts: Deflation not a concern

Food

Although they expect a trend of flat or falling prices to continue, experts said today that there is no need for concern of a damaging level of deflation in Hungary.

Analysts had predicted a slight growth of 0.1% inflation in April and 0.1% in May, but the Central Statistics Office announced yesterday that Hungary’s inflation rate in May was actually -0.1% as compared with a year ago.

Analysts noted several factors that kept prices down in May, including a government-mandated 6.5% decrease in gas prices, which was put in effect just before the early April elections and was included in the May statistics. Furthermore, agriculture prices were dropping worldwide, helping to keep food prices down.

Given the situation, analysts such as Zsolt Kondrát of MKB Bank, Orsolya Nyeste of Erste Bank and Dan Bucsa of London-based UniCredit all predicted inflation would be somewhere between 0% and 0.5% at years end, according to Portfolio.hu.

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