Analysts put year-end twelve-month inflation this year at 4.1-4.2% after October CPI came in at a higher than expected 3.9% in a statistical release on Friday.
The headline figure published by the Central Statistics Office (KSH) was over the 3.6% consensus by analysts.
Gergely Suppan, chief analyst for Takarékbank, said that while weak domestic demand and a high base for food prices would cause inflation to slow in the coming months, the elimination of gas price subsidies, a tax on unhealthy foods and an excise tax hike would push prices up. He put year-on-year inflation in December at 4.1% and average annual inflation at 3.9%.
CIB Bank’s György Barta noted that the slight 0.2% month-on-month rise in the price of consumer durables and the 0.2% drop in service prices in October show weak domestic demand, but he still saw twelve-month inflation rising to 4.2% in December, bringing annual average inflation to 4.0%.
Both analysts said inflation gave the central bank no reason to raise rates, but added that growing market turbulence or a sharply weaker forint could cause rate-setters to rethink a tightening of monetary policy.
The National Bank of Hungary’s Monetary Council left the base rate on hold for the ninth month in a row at a meeting in October.