CPI reaches 4 percent in May

Headline CPI reached the 3.0 percent +/-1 percentage point tolerance band of the National Bank of Hungary (NBH) in January after peaking at 25.7 percent a year earlier, supported by government measures and central bank monetary policy.

Food prices rose by 1.0 percent in May. Household energy prices fell by 2.4 percent. Gas prices were 4.7 percent lower and electricity prices declined by 2.9 percent.

Consumer durable prices edged down 1.7 percent.

Prices in the category of goods that includes vehicle fuel rose by 5.1 percent as motor fuel prices increased by 9.2 percent.

Harmonised inflation, adjusted for better comparison with other European Union member states, reached 3.9 percent.

Core inflation, which excludes volatile fuel and food prices, was 4.0 percent.

The CPI calculated with a basket of goods and services used by pensioners was 3.9 percent.

Month on month, consumer prices edged down 0.1 percent.

Commenting on the data, Marton Nagy, the national economy minister, said inflation had “collapsed” as a result of targeted government measures such as mandatory discounts at big supermarket chains and an online platform for monitoring food prices. The price competition generated by government measures kept the inflation low, he added.

“Low inflation benefits families and the economy as well,” the ministry quoted Nagy as saying. The minister added that “in a positive chain reaction” in the national economy, real wages had been rising since September increasing the value of a family’s income.