Hungary September Inflation Misses Forecasts Despite Fuel Price Surge

Key Facts

1Inflation in Hungary accelerated by much less than expected in September.

2Subdued underlying price pressures offset the surge in fuel prices during the period.

Inflation in Hungary accelerated by much less than expected in September, as subdued underlying price pressures offset a surge in fuel prices. ING reported that consumer prices rose by 0.2% month-on-month, bringing the headline annual inflation rate to 1.6% for the period.

Services inflation remained the primary source of pressure at 4.9% year-on-year, while the core inflation reading of 1.9% in September was characterized as favorable. With no current price levels available for local instruments, analysts suggest that weak domestic demand may absorb external shocks, potentially allowing the base interest rate to reach 5.25% by the end of the year.