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Hungary December inflation picks up to 5.6 %, in line with consensus

Hungary's twelve-month consumer price inflation accelerated to 5.6% in December from 5.2% in November, the Central Statistical Office (KSH) said on Thursday.

The twelve-month December figure was roughly in line with the 5.64 % consensus in a poll by MTI among City analysts in London. Twelve-month inflation started to pick up in November after falling in the previous three months.

Compared to the previous month, consumer prices did not change, after rising 0.3% in November.

Annual average inflation was 4.2% last year, down from 6.1% in 2008.

Monthly inflation in December was highest, 0.8%, for electricity, gas and other household fuels, while consumer durables were cheaper by 0.2% and prices of clothing and footwear dropped by 0.4%.

Twelve-month inflation was highest, 10,2%, for motor fuels and lubricants, alcoholic beverages and tobacco were also 10.0% more expensive, while clothing and footwear prices went up by only 0.1% year-on-year.

In annual averages, the price rise of electricity, gas and other household fuels was the highest, 8.2%, and the price rise of alcoholic beverages, tobacco, 7.5%, that of services, 4.6%, and of food items, 4.4%, was also higher than average. Price increases of consumer durables, 2.6%, and of clothing and footwear, 0.5%, was below average.

Calculated for European purposes, the harmonized index of consumer prices (HICP) was a monthly minus 0.2% and 5.4% for twelve-month in December, and 4.0% annual average for the whole of last year.

Seasonally-adjusted core inflation was 0.1% month-on-month and 4.8% year on year in December, with annual average coming in at 4.1%.

The price index of pensioners, also calculated by KSH, was in line with the headline figure in December month-on-month, and with 4.9% was under the headline rates year-on-year. Its annual average rate, 4.9%, was over the 4.2% headline figure.

After a two-year slowdown from 9% in March 2007 to 2.9% in March this year, twelve-month headline inflation was hovering between 3% and 4% late spring before a July hike in Hungary's main VAT rate from 20% to 25% raised it to 5.1% in July from 3.7% in June. The effect of the VAT rise, has been, however, muted, and CPI fell each month up to October before rising again in November. After four consecutive months of downside surprises, November figure was higher than expected. Analysts expect the recession to drag on, and the rate onto a falling trend next year. (MTI-Econews)