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Hungary’s annual consumer price index stood at 3.1% in August, down from 3.3% in the previous month, the Central Statistical Office (KSH) said. Headline inflation was lifted by an 8.8% increase in the price of spirits and tobacco and a 5.6% rise in food prices. CPI harmonised for better comparison with other European Union member states was 3.2% in August. Seasonally-adjusted core inflation, which excludes volatile fuel and food prices, was up 3.7%. Inflation calculated using a basket of goods and services used by pensioners stood at 3.4%. In a month-on-month comparison, consumer prices fell by 0.1% in August.
In a monthly analysis released after the publication of the KSH data, the National Bank of Hungary (NBH) attributed the drop in headline inflation mainly to a drop in the price index for unprocessed food. The central bank’s measure of core inflation excluding indirect tax effects – a bellwether indicator of underlying inflation – was 3.2% in August, level with the previous month.
After a monthly rate-setting meeting in August, NBH policy makers said core inflation excluding indirect tax effects “is likely to decline gradually to 3% from the end of 2019” because of a “strengthening of disinflationary effects”.
The NBH’s monthly analysis shows the central bank’s indicator for demand-sensitive inflation, which excludes processed foods from core inflation, stood at 2.9%, also unchanged from the previous month. The indicator for sticky price inflation, which includes items for which retail prices vary, on average, no more than 15% a month, was steady, too, at 3.4%. The NBH said households’ inflation expectations “remained moderate, at a level consistent with the 3% inflation target” in August.