Hungary Inflation Unexpectedly Slowed in December on Fuel, Food

Hungarian inflation unexpectedly slowed in December on fuel costs and pre-Christmas price cuts on food items.

Consumer prices advanced 4.1 percent from a year earlier after a 4.3 percent increase in November, the statistics office in Budapest said today. The median estimate of 11 analysts surveyed was 4.3 percent. Prices rose 0.2 percent from November.

The central bank raised its benchmark interest rate last month by a half-point to 7 percent, the European Union’s highest, and policy makers said they were ready for further increases if warranted by the outlook for inflation and risk perception. The forint weakened after the EU and the International Monetary Fund suspended aid talks.

“Fuel prices were more favorable in December than a year ago just as food prices, which benefited from pre-Christmas sales,” statistician Borbala Minary told reporters today.

Fuel prices in December rose 6.8 percent from a year earlier, compared with 8.6 percent in November. Food prices rose 4.6 percent, compared with 5.1 percent.

Core inflation, which strips out volatile food and energy prices, rose 3.3 percent in December from a year ago, compared with 3.1 percent in November. The inflation rate averaged 3.9 percent in 2011.

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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