Inflation decreased to 25.4%

By: Trademagazin Date: 2023. 03. 08. 12:42

Inflation moderated to 25.4% in February after the peak of 25.7% in January, which was primarily caused by the drop in fuel prices in February, on the other hand, the price of spirits rose much more than expected, while the rise in food prices already showed a slowdown. The peak of inflation is reflected by the fact that core inflation also slowed down to a small extent, to 25.2%. Last year, consumer prices increased by an average of 14.5%.

In the coming months, due to base effects, the continuous decrease in fuel prices and price reductions announced for some food products, we expect inflation to moderate gradually and then sharply from the middle of the year, so we expect inflation to peak in January. Base effects can be strengthened by the fact that international raw material, crop and energy prices and transport costs have fallen significantly in recent months, so we do not expect any further external price shocks, and the strengthening of the forint can also moderate inflation. The formation of a price-wage spiral can be observed in some sectors, which may slow down the rate of inflation, however, we still expect single-digit inflation by the end of this year. At the same time, this year’s average annual inflation may exceed our previous expectation of 17.6%.