New lows for the Hungarian inflation in December, but no underlying disinflation process
The Hungarian consumer price growth moderated from 0.9% Y/Y in November to 0.4% Y/Y in December as expected. So, the average inflation was 1.7% Y/Y in 2013. Prices dropped by 0.5% M/M in December. Despite of the falling headline figure core inflation remained at the same level as in November at 3.5% Y/Y. The main reason behind the decreasing inflation is the effect of the public utility cost reduction of gas, electricity and district heating, which explains 0.9% Y/Y drop of CPI in November and December. Also food prices are moderating inflation thanks to the good harvest in 2013, while tradable goods prices were almost stagnating, which reflects the still relatively weak, but at least stabilizing households consumption. Fuel, market services, alcohol and tobacco prices were increasing in December.
Read the full report: FX Daily
KBC