Hungary: Inflation recedes in November
Consumer prices dropped 0.20% from the previous month in November, contrasting October’s 0.20% uptick. November’s figure largely reflected lower prices for services.
Inflation fell to 2.7% in November, from October’s 3.0%. October’s reading marked the lowest inflation rate in six months. Meanwhile, the trend pointed down, with annual average inflation coming in at 3.4% in November from 3.5% in October. Lastly, core inflation inched up to 3.9% from the previous month’s 3.8%.
Commenting on the outlook, Peter Virovacz, senior economist at ING, stated:
“Purely from an inflation point of view, the room for monetary policy has improved significantly. The data since September came in well below the central bank forecast, so we expect a downward revision in inflation outlook in the December Inflation Report. On the other hand, the debate over the rule-of-law issue brings in huge amounts of uncertainty, not just from a financing and a growth point of view but also from an FX perspective too. As such, we expect the central bank to wait-and-see. Our forecast is that inflation will drop further on base effects and lack of demand-driven inflation. In the first quarter of 2021, we see headline inflation coming close to 2%.”