HUNGARY
Consumer price growth beat expectations again in February, with the annual figure up from +5.5% Y/Y in January to +5.6% Y/Y. That compares to expectations of a moderation to +5.3%. Month-on-month, prices rose 0.8%.
- Among the subcategories, “Other goods, including motor fuels” contributed around -0.4ppts to the year-on-year inflation figure – this had been anticipated given the favourable base effects in fuel prices. However, this was offset by a strong contribution from the “Food” and “Services” components, which contributed around 0.3ppts and 0.2ppts to the headline figure, respectively (see charts below).
- Core inflation edged higher from +5.8% Y/Y to +6.2%, reaching its highest level since December 2023. On an annual basis, food prices surged 7.1% in February, including a 44% rise in the cost of flour, 25% for eggs and almost 23% for milk. Services prices jumped 9.2%.
- The data will warrant further caution from the NBH at the Mar 25 MPC meeting. In his first public remarks as Governor, Mihaly Varga said over the weekend The NBH needs to concentrate on achieving and maintaining price stability, and that increasing uncertainty surrounding external macroeconomic factors and pointed to the need for disciplined, patient monetary policy. In practice, this likely means there will be little change to the Bank’s hawkish comms in its next policy statement.
212 words