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Consumer price inflation 5.1% yr/yr in July

Twelve-month consumer price inflation was 5.1% in July after 3.7% in June as Hungary's main VAT rate rose from 20% to 25% from July 1, the Central Statistical Office (KSH) said on Tuesday. Consumer prices rose 1.3% in July from June following a monthly rise of just 0.1% in the previous month. Twelve-month inflation was down from analysts' average forecast of 6.1%.

The effect of the rate hike in VAT and excise taxes is shown by the fact that discounting the tax changes consumer prices were 2.1% down from the preceding month and would have risen just 1.4% from July 2008. In June, tax-cleared prices remained flat from the preceding month and the twelve-month figure was the same 3.7% as the unadjusted headline inflation.

Seasonally adjusted core inflation of 2.3% month-on-month and 5.2% yr/yr in July accelerated from 0.4% and 3.2%, respectively. (MTI-Econews)