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Hungarian October inflation slows to 4.7%, below consensus

Hungary's twelve-month consumer price inflation slowed to 4.7% in October from 4.9% in September, the Central Statistical Office (KSH) said.

The slowdown was helped by falling fuel prices and a slow rise in food prices.

In a month-on-month comparison, consumer prices were unchanged in October after a 0.1% drop in September, as fuel, consumer durables, household energy and services all became cheaper, though food prices rose, albeit moderately, after drops in each of the preceding four months.

Consumer prices rose 4.0% in January-October from the same period a year earlier.

The twelve-month figure was under the 5.0% consensus in a poll by business daily Napi Gazdaság. Estimates by City analysts varied between 4.7% and 5.1%.

Analysts have overestimated the actual CPI each month since July as a hike in Hungary's main VAT rate from 20% to 25% from July 1 raised headline inflation less than expected as a result of poor demand. Twelve-month inflation rose to 5.1% in July from 3.7% in June, and has fallen since.

Excluding the effect of tax changes, consumer prices rose just 0.9% yr/yr in October after a 1.1% rise in September, level with the adjusted increase in August. Tax-adjusted prices were unchanged from September after a monthly drop of 0.2% a month earlier.

Seasonally-adjusted core inflation slowed in October as monthly core inflation leveled out after a 0.1% increase in September, and twelve-month core inflation dropped to 4.9% from 5.1% in September.

Calculated using the EU's harmonized consumer price index (HICP), Hungary's twelve-month inflation was 4.2% in October, slowing from 4.8% September. In a month-on-month comparison, prices fell 0.2% in October as they did in September.

The price index of pensioners, also calculated by KSH, continued to exceed the headline figure, showing a rise of 4.9% yr/yr and 0.2% in a month.

Consumer durable prices fell the steepest from September, by 0.7%, in the first monthly drop since March and prior to that in August 2008. They were still up 4.9% in one year.

Vehicle fuel prices fell 2.6% in a month and 4.4% in a year; though the figures do not yet include the prices rises at the end of October as Borbála Minary of KSH told reporters.

Pharmaceutical prices rose 1.9% a month and 8.5% in twelve months.

A 0.3% month-on-month drop in the price of services reflects dropping motorway and plane fees. Services still became 5.6% more expensive in a year, including a steep 16.2% rise of garbage collection fees, and a 11.6% rise in the price of water and a 11.5% increase in the cost of sewage services.

October food prices were up 0.1% a month in the first rise since May. Seasonal foodstuff prices rose 1.7% after dropping for several months. Declining edible oil, poultry, sugar, chocolate and cocoa prices tempered the increase. Food prices rose 2.8% in twelve months.

Spirits and tobacco prices rose 0.6% in a month and were up a sharp 9.6% yr/yr, boosted by excise duty rises.

Household energy prices fell 0.2% from September as district heating prices dropped, but the prices still rose an above-average 5.8% in the twelve months to October. (MTI – Econews)