Hungary’s inflation accelerated more than economists forecast last month, fueled by an increase in seasonal food and energy prices.
Consumer prices rose 1.9 percent from a year earlier after a 1.8 percent increase in May, the statistics office in Budapest said today. The median estimate of 16 economists in a Bloomberg survey was for a 1.8 percent increase. Prices rose 0.2 percent from May, compared with a median estimate for a 0.1 percent increase.
With the inflation rate holding near a 39-year low it reached in April on the back of government-mandated household energy-price cuts, the Magyar Nemzeti Bank was able to lower its benchmark rate to a record-low 4.25 percent last month. The easing cycle that started in August 2012 isn’t over yet and rate setters are in favor of “gradual, cautious” cuts in “small steps,” central bank Vice President Ferenc Gerhardt said in an interview with weekly Heti Valasz, published today.
“The main reason for the low rate of the annual price increase is the substantial reduction in household energy costs,” the statistics office said in an e-mailed statement. “There was also a significant price drop in consumer durables, while alcoholic beverages, tobacco products, food and services became more expensive than a year ago.”
The forint strengthened 0.4 percent to 293.28 per euro as of 9:47 a.m. in Budapest. It has gained 1.1 percent in the past three months, the third-best performance among 24 emerging-market currencies tracked by Bloomberg.
Seasonal food and holiday-related service prices were the main drives of price growth in June, statistician Borbala Minary told reporters today.
Household energy costs dropped 8.7 percent from a year earlier, while prices in the services industry rose 4 percent. Food prices increased an annual 4.1 percent and alcohol and tobacco costs jumped 8.8 percent.
The core inflation rate, which strips out volatile items such as energy costs, was 3 percent from a year earlier and 0.2 percent from May, according to the statement.
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