Consumer prices rose 2.0% year on year in March, the Central Statistical Office (KSH) reported on Tuesday. Analysts’ consensus estimate in a Portfolio poll was also 2.0. The highest price increases in the third month of the year were measured for alcoholic beverages and tobacco as well as food, the stats office remarked.
Inflation has not caused much of a surprise not only in respect of the headline figure, but there is no turmoil in the details, either. Food prices did go up on a month-on-month basis, particularly seasonal food items (potatoes, fresh vegetables and fruits) (+3.8%), pasta products (+1.7%) and rolls (+1.2%), while the cost of eggs dropped 6.5% and sugar cost 2.8% less for consumers.
The price of clothing and footwear was up by 1.6% due to the traditional change to the spring collection, while the price of consumer durables dropped 0.2%, showing that the mild global inflationary environment continues to have a cooling effect in Hungary.
In annual terms, food prices rose by 4.1%, within which eggs became 27.0%, butter 14.2%, pasta products 11.1%, milk products 6.9%, milk 5.9% and bread 5.6% more expensive. Sugar became 18.1% cheaper. The highest price increase of 6.8% on average was recorded for alcoholic beverages and tobacco. Electricity, gas and other fuels turned 1.4%, within which firewood 13.3% and butane and propane gas 5.4% more expensive, the prices of electricity, natural and manufactured gas and purchased heat were unchanged. The price of services was up by 1.1% and that of clothing and footwear by 0.3% on average. Consumers paid 0.4% less for other goods(pharmaceutical products, motor fuels, household products and recreational goods), within which 2.0% less for motor fuels, and 1.2% less for consumer durables.
Core inflation at 2.5% yr/yr also indicates that there is no meaningful inflationary pressure in the Hungarian economy.
Consequently, the latest CPI print will not alter the central bank’s monetary policy, given that inflation provides no reason to revise persistently loose monetary conditions.
