Analysts polled by the business daily Napi Gazdaság expect 5% twelve-month consumer price inflation in October, level with the previous three months, then annual inflation could rise to 6% by the end of the year due to lower base figures, largely in line with IMF and government predictions.
The Central Statistical Office (KSH) will publish its October inflation report on Wednesday, November 11.
Prices remained almost unchanged, with price rises in certain areas offset by price falls elsewhere, Gergely Suppan of Takarékbank said. From November, however, petrol price rises will speed up compared to one year earlier to an extent that will not be counterbalanced by the slowdown in food price rises or by falling energy prices. As petrol prices have been rising steadily since February, the low November base alone will push up the year-on-year (yr/yr) price index significantly.
The end-of-year peak in inflation could be followed by a moderate disinflation, Suppan said. Although the cut in district heating charges could boost the process, utility companies will probably not restrain their price rises. From July next year, however, bypassing the effect of the VAT cut, the figure could suddenly fall below the 3% inflation target.
Later on, the curve largely depends on oil price forecasts, Zsolt Kondrát of MKB added. If the optimistic scenario regarding global economic growth materializes, and the projected correction takes place, but does not act as an impediment to expanding production, the oil price could rise as high as $90 - $100, resulting in a consumer price index of 3.3% by the end of 2010 in Hungary. If this does not happen and the projected growth fails to materialize, inflation could be as low as 2% or less. The analysts' consensus is 2.8%.
In October, the IMF projected year-end inflation of 6.1% this year, 2.4% next year, 2.7% in 2011, and 3.0% in each of the following three years. Annual average inflation is seen by IMF 4.5%, 4.1%, 2.5% and 3.0% respectively. (MTI – Econews)