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Hungary CPI slows to 5.0% in December; avg annual reaches 5.7%

Consumer prices in Hungary rose 5.0% year-on-year in December, lifted by higher food, spirits and tobacco prices, but slowing from a 5.2% increase in the previous month, the Central Statistics Office (KSH) said on Tuesday.

Hungarian analysts polled by business daily Napi Gazdaság as well as London-based emerging market analysts polled by MTI had put twelve-month CPI in December at 5.2%. Food prices were up 7.0% and prices of spirits and tobacco climbed 13.5%. Household energy prices increased 4.7%, service prices rose 4.5% and the price of "other goods", which includes vehicle fuel, climbed 2.9%. Consumer durable prices fell 1.8%.
In a month-on-month comparison, prices were flat in December after edging down 0.1% in November. Food prices were flat on the month and prices in the category that includes vehicle fuels fell 0.3%, but service prices rose 0.4%. Annual average inflation for 2012 came to 5.7%, up from 3.9% in the previous year. Food prices climbed 5.9% on average and spirits and tobacco prices rose 12.7%. Household energy prices were up 6.2% and prices in the vehicle fuel category rose 7.2%, but service prices increased just 4.2%. Seasonally-adjusted core inflation, which excludes volatile food and fuel prices, rose 4.9% year-on-year in December, slowing from increases in October and November. Month-on-month, core inflation slowed to 0.2% in December from 0.3% in November.
Excluding the effect of tax changes, twelve-month inflation was up just 3.2% in December. The tax-adjusted index was unchanged month-on-month. Hungary's year-on-year CPI harmonised for comparison with other European Union member states was 5.1% in December. Calculating with a consumer basket used for pensioners prices were up 5.2%. For the full year, core inflation averaged 5.1% and the tax-adjusted index came to 3.5%. In 2011, average annual core inflation was 2.7% and prices adjusted for tax changes were up 3.8%.
Erste Bank analyst Orsolya Nyeste said an excise tax increase on tobacco products in December had not yet shown up in prices but would in the coming months. A government initiated cut in household energy prices will keep prices down this year, she added, putting average annual inflation at 4.4%. TakarékBank's Gergely Suppan also said the lower-than-expected increase of tobacco and spirits prices kept headline inflation down in December. He said CPI was likely to fall to 4.0-4.3% in the first half of this year and put average annual inflation at 4%.