THE NATIONAL BANK
Consumer prices in
The growth in prices was broad-based, with more than 90% of 140 products in the consumer basked tracked by KSH showed annualised price increases.
Prices in the category of goods that includes vehicle fuel climbed 15.1% as vehicle fuel prices jumped 37.7% y/y. The HUF480/litre cap on retail fuel prices from the middle of the month had little impact on the November data, as KSH tracks data until the 20th of each month.
Food prices climbed 6.0%, household energy prices edged 0.9% higher, consumer durable prices rose 6.6% and clothing prices increased 1.8%. Service prices rose 4.6%.
In a separate report,
Core inflation excluding indirect tax effects – a bellwether indicator of underlying inflation – rose by 0.6% m/m to 5.3% to the highest level in 13 years.
The MNB said the indicators measuring households' inflation expectations "showed unusually high volatility" and rose from the previous month. It added that their value is above the central bank's tolerance band.
Analysts see the prospect of a slowdown in the coming months as unlikely given the supply constraints in the industry, the rise in energy prices and the government’s expansionary fiscal policy ahead of the spring elections.
The weak currency and rising wages triggered by the tight labour market and the government’s giveaway, including a HUF600bn (€1.64bn) tax rebate for families also represent significant upside risks in the short term.
The Hungarian central bank is ready for a long tightening cycle to bring inflation down, according to central bank governor
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