Inflation in Hungary was 5.5% last December. – according to data from the local statistical office. Thus, a country that at the beginning of 2023 was struggling with 25 percent. inflation, now it has caught up with Poland in this respect.
The Hungarian Central Statistical Office (KSH) reported that CPI inflation in this country amounted to 5.5% in December 2023. year to year, compared to 7.9 percent in November. This is the eleventh consecutive decline in price growth dynamics and the lowest reading since September 2021.
Inflation in Hungary. From 25 to 5.5 percent
The latest data on the prices of consumer goods and services in Hungary may be impressive, because at the beginning of last year Victor Orban’s country was facing inflation of 25%. It reached a single-digit level only in October (9.9 percent, compared to 12.2 percent in September). Hungary was the last European Union member state to combat double-digit inflation, not to mention the fact that for many months it was the inglorious leader of Eurostat’s inflation ranking (recently giving way to the Czech Republic in this respect).
The latest inflation reading in Hungary – as Bankier.pl notes – turned out to be significantly lower than market forecasts. The market consensus assumed a reading level of 6%.
The portal points out that such a significant drop in Hungarian inflation is partly due to the expiration of the low base effect on the domestic fuel market. Until December 2022, Budapest maintained artificially low administrative prices for gasoline and diesel. But more than a year ago, Hungary made a sudden break with the policy of maintaining official fuel prices, which led to a sharp increase in the CPI in 2023. In the data for the last month of last year, this effect has just faded away.
The average annual CPI inflation in Hungary was 17.6 percent last year. The largest increases were in the prices of food products (by almost 26%), as well as energy and gas (by 18.6%), as well as fuels, alcoholic beverages and tobacco products (by 15.4%).
Hungary has caught up with Poland
For the first time in almost a year and a half, inflation in Hungary is lower than in Poland. Let us recall that according to preliminary data from the Central Statistical Office (GUS), inflation in December last year amounted to 6.1%, compared to 6.5%. in November. The record in our country is 18.4%, which was recorded in February 2023.
During Wednesday’s press conference, the president of the National Bank of Poland (NBP), Adam Glapiński, emphasized that in March we can expect a drop to approximately 3%, i.e. around the inflation target. – We expect a significant drop in inflation. In the first quarter it may be even faster than we expected. This means that in the near future it may fall to around 3 percent, i.e. the NBP target of 2.5 percent. In March we will be at or very close to the inflation target. It’s completely amazing – said the head of the central bank.
Glapiński noted, however, that in the second half of the year inflation may rebound and even double.