Annual inflation falls to 17.6 percent in July

Food prices rose by 23.1 percent in July, while household energy prices increased by 35.7 percent.

Prices in the category of goods that includes vehicle fuel rose by 17.2 percent, while spirits and tobacco products increased by 14.6 percent and clothing prices by 8.0 percent. Service prices increased by 14.6 percent, accelerating from a 14.4 percent rise in June.

Core inflation, which excludes volatile fuel and food prices, was 17.5 percent.

The CPI calculated with a basket of goods and services used by pensioners was 18.7 percent.

In a month-on-month comparison, consumer prices edged up 0.3 percent.

Commenting on the data, Marton Nagy, the minister of economic development, insisted that government measures had been “brutally effective”, and “sanctions-fuelled” inflation may be reduced to single digits by October. Hungary had entered a period of “dynamic inflation reduction” thanks to targeted government measures such as online price monitoring, he added.

He said the 0.9 percent drop, month on month, in food prices was an important component of the general decrease in inflation and food inflation had almost halved from its peak on an annual basis.

He said price monitoring had generated competition between food retailers, with prices falling in 53 of 62 product categories monitored. Lower food prices in July may have led to a 0.7 percentage point easing in general inflation, he added.

Nagy also noted the competition authority’s involvement in strictly monitoring multinational retailers with a view to preventing price gouging.