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Hungary CPI slows to 5.1% in May

Hungary's twelve-month consumer price inflation slowed sharply further to 5.1% in May from 5.7% in April, the Central Statistical Office (KSH) said on Friday. The slowdown was helped by a base effect. Monthly inflation picked up to 0.9% from 0.5% in April, boosted by rising fuel, seasonal foodstuff and gas prices.

The figures were in line with a consensus of analysts polled by the business daily Napi Gazdaság who forecast May twelve-month inflation at 5.1% and projected monthly inflation of 0.9%. City analysts polled by MTI put the May twelve-month figure between 4.9% and 5.1%.

The slowdown was expected because of a high base as twelve-month inflation in May 2009 was boosted by a sharply yr/yr rise of food prices. Pushed higher by last July's tax rises, twelve-month inflation accelerated to 6.4% in January, slowed in February but rose again to 5.9% in March.

Seasonally-adjusted core inflation stayed at 0.1% a month in May and twelve-month adjusted core inflation slowed from 4.3% to 4.0%.

Excluding tax changes, May consumer prices rose 0.9% a month, just as the headline index did, with no tax effects in between April and May. Twelve-month price increases were, in contrast, significantly boosted by the tax changes in the past twelve months, including last July's VAT rises and excise duty rises, as excluding tax effects, consumer prices rose just 0.9% yr/yr in May. The figures compare to 0.5%-a-month and 1.5% yr/yr tax-adjusted increase in April.

The three main factors behind May's higher monthly inflation were a 7.6% rise in seasonal foodstuff prices, a 10.8% rise in the price of pipe gas and a 2.1% rise in vehicle fuel prices. These factors contributed 0.2 percentage points, 0.3percentage points and 0.1 percentage points, respectively, to the 0.9% monthly rise, Borbála Minary of KSH said.

In a twelve-month drop without precedent since May 1999, food prices fell 1.3% yr/yr in May, Ms Minary noted.

Food prices were driven below their May 2009 level by 12.6% lower seasonal foodstuff prices, by a 10.1% drop in the price of flour, 8.9% lower sugar prices a 7% drop in pork prices among others. Food prices rose, however, 1.1% from April although were unchanged excluding seasonal foodstuff prices.

Household energy prices rose 4.1% a month, driven up by the increase of the pipe gas price, and were up also an above-average 8.3% in twelve months as electricity became 12.3% more expensive, pipe gas prices rose 10.9% yr/yr while the price of distant heating, due to a preferential VAT rate introduced early this year, was down 16.3%.

Spirits and tobacco prices rose 0.8% a month and were up 11.1% yr/yr.

Fuel prices were up 27% from May 2009 and pharmaceuticals prices (both included in the other goods category) rose 5.8%.

After sharp rises in the previous two months, clothing prices fell 0.6% in May and were 1.2% down from a year earlier.

Consumer durable prices fell 0.4% from April despite a more than 1% weakening of the forint, and were up 1% in one year.

Services prices rose a below average 0.3% in May, their lowest monthly increase so far this year but they still exceeded their one-year earlier levels by 5.7%, with above average yr/yr increases in the price of long-distance travel (14.2%), of garbage collection (11.2%) or public transport (9.9%).

Calculated for European comparisons, prices rose 0.7% a month and 4.9% yr/yr according to the harmonized index of consumer prices (HICP) in May. Both the monthly and the twelve-month increase slowed from 0.9% and 5.7%, respectively, in April.

The price index of pensioners, also calculated by KSH, showed a steep 1.3% monthly rise, higher than the headline index, and also up from the 0.4% increase in April. The twelve-month pensioner index dropped, in contrast, to 3.8% from 4.6% in April. Inflation in January-April averaged 5.8%, KSH said. Annual average inflation was 4.2% last year, down from 6.1% in 2008. (MTI-Econews)