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Hungary's inflation rate drops to the lowest since June

Consumer prices decreased by 0.6% in August 2010 compared to the previous month, but rose by 3.7% compared to August 2009, the Central Statistics Office (KSH) reported on Friday. In the first eight months of 2010 the average price increase was 5.2% compared to the corresponding period of the previous year.

The 0.6% drop in August was the first MoM decrease since September 2009, while the twelve-month 3.7% increase was the lowest since June 2009. Seasonally adjusted core inflation, which excludes certain items that face volatile pice movements, such as food and energy prices, from the CPI, was up 0.3% MoM and 1.5% YoY.

Food prices decreased by 1.9% MoM, mainly due to the 13.9% price decrease of seasonal food items (potatoes, fresh vegetables, fruits) and a 0.4% price rise of the other items.  Higher prices were seen in case  of edible oil (5.7%), milk (1.5%) and poultry meat (1.4%) , while a price decrease was observed in case of salami, sausages, ham (1.7%) and egg (1.2%).

Services saw the highest increase, at 0.4%, within that, prices of recreational services grew by 3.7%. In case of alcohol beverages and tobacco, prices rose 0.3%. Consumers paid 1.5% less for clothing and footwear than in the previous month, mainly due to the summer sale. Prices of electricity, gas and other fuels decreased by 1.2% whitin that prices of electricity dropped by 3.6%. In case of consumer durables and other goods, there was a decrease of 0.3–0.3%. Within other goods, motor fuel prices dropped 0.7% on average.

Food prices grew by 3.7% YoY in August 2010. In this category, price increases were observed for seasonal food items (37.3%), cheese (8.3%) and meals at restaurants, canteens (3.0%). Prices decreased in case of flour (10.6%), edible oil (9.6%), sugar (9.0%), rolls (7.1%) and pork (6.1%). The 6.1% price rise of electricity, gas and other fuels was higher than average. Within that, prices of natural gas rose by 14.0%, while purchased heat decreased by 12.0%.

Both alcohol beverages and tobacco and other goods saw higher than average price increases, at a respective 6.6% and 5.8%. Within the latter category, there was a 13.9% price increase in motor fuels and a 4.9% increase in pharmaceutical products. In case of services, the price rise was under the average (2.8%) while long distance travel grew by 13.4%, refuse disposal by 6.5% and local transport by 5.0%. Consumers paid 2.1% less for consumer durable goods and 1.1% for clothing and footwear than in the corresponding month of the previous year. (MTI - Econews)