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Inflation from 8% to 3.9%

November inflation data did not surprise anyone. Analysts interviewed by Hungarian News Agency (MTI) said it was evident that food and fuel price hikes increased CPI.

Stands on next year's wage agreement drew closer as employers proposed a 4.5-6.0% 2008 gross wage increase instead of a flat 4.5% rise during a Monday-morning meeting of the National Interest Coordination Council (OET) on a nation-wide wage rise recommendation for 2008. CPI grew 0.6% in November compared to October, and were 7.1% higher to same time last year while year on year inflation was only 6.7% in October. Orsolya Nyeste analyst of Erste Bank said she expects next years inflation to stay under 6% in Q1. Gergely Suppan analyst of Takarékbank said that food price increase seems to slowly have come to its end. Both analysts expect prices to increase 8% this year and 5.3-5.6% next year. Analysts in London, after Tuesday’s data on inflation, agree, that financial “ease” can earliest in the middle of Q1 or rather in Q2 of 2008 in Hungary. Some analysts believe that due to the forthcoming negative inflation base-effects, in the second half of next year, there can be an aggressive cut of the interest-rates. Hungary’s inflation could slow down to 3.9-4.0% by the end of 2008. (Gazdasági Rádió)