Inflation rate steady at 2.7 percent in December

Hungary's inflation rate was 2.7 percent in December, level with the rate a month earlier, the Central Statistical Office (KSH) said. Upside pressure on inflation came from food, spirits and tobacco products, while vehicle fuel prices dropped.

Food prices rose by 4.9 percent and the price of spirits and tobacco products went up by 8.8 percent.

Prices in the category of goods which includes vehicle fuel fell by 0.5 percent as vehicle fuel prices dropped by 4.5 percent.

In a monthly analysis released after the publication of the KSH data, the central bank said headline inflation in December was “driven by a stronger price growth of alcohol and tobacco products”. The central bank reiterated that pricing decisions have shown “higher volatility” and “an unusual seasonal pattern” in recent months because of the pandemic, noting higher repricing in the summer months followed by a strengthening of disinflationary effects from September.

The central bank’s measure of core inflation excluding indirect tax effects – a bellwether indicator of underlying inflation – rose to 3.4 percent in December from 3.3 percent in the previous month.

Commenting on the data, the (Socialist) head of parliament’s welfare committee accused the government of using the higher inflation indicator as reference point when it came to collecting revenues and the lower figure in calculating benefits for pensioners.

Lajos Korozs told an online press conference that the price of vegetables and fruit had seen a 22 percent increase, while cooking oil had gone up by 13 percent, hitting pensioners hard.

“While the number of pensioners in the lowest income bracket was 26,000 in 2010, their number reached 270,000 last year,” Korozs said.

He said the old-age pension minimum of 28,500 forints (EUR 79) had stagnated over the past 12 years and about 1.7 million of Hungary’s 2.5 million pensioners received less than 200,000 forints per month.

Leave a Reply