Hungary: Inflation pressure remains silent
Headline CPI came in at 2.1% year-on-year in January, matching the 2017 December reading while core CPI increased to 2.5%
| 2.1% |
Headline inflation YoYConsensus (2.0%) / Previous (2.1%) |
The January headline CPI remained unchanged at 2.1% year-on-year, matching the 2017 December data and showing no sign of inflation pressure. The first reading of the year roughly matches market expectations (2.0% YoY). Core inflation, excluding raw food and energy prices, grew 2.5% compared to the same period a year earlier.
Headline and core inflation measures (% YoY)
The strongest price growth was posted in foods, alcoholic beverages and tobacco. Food prices increased by 4.4% YoY, suggesting the VAT decrease in several food types (such as fish) hasn’t impacted consumer prices equally. Price of foods, alcoholic beverages and tobacco increased by 6.5%, significantly exceeding the 3.3% YoY average growth of 2017. Regarding services, VAT cuts in internet-services are visible, although the low base effect counterbalanced prices, resulting in a 0.8% YoY increase. Due to the strong base effect, prices of fuel decreased by 1.3 % YoY.
CPI by main groups in Jan-18
Bottom line
All in all, the first reading of the year silenced the hawkish voices. We still expect 2.7% inflation in 2018 as a whole, above the NBH’s expectation of 2.5%, so we're unlikely to see any change in the central bank’s monetary stance.
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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