August inflation surprise: Slowing monetary deterioration, improving purchasing power

By: Trademagazin Date: 2024. 09. 12. 14:50

The latest inflation data from the Central Statistical Office (KSH) caused a significant surprise, as the rate of monetary deterioration slowed down to only 3.4 percent in August, which is well below the 4.1 percent in July. The majority of analysts expected a higher inflation value of 3.7 percent, so the current data can be considered a particularly positive turn. The consumer price index was last lower than this in February 2021, when it stood at 3.1 percent. The decrease in inflation is definitely favorable for Hungarian households, especially for pensioners, for whom the rate of monetary deterioration has also significantly decreased.

Inflation trends and the situation of pensioners

According to KSH data, inflation moderated in all population groups in August. In the case of foodstuffs, inflation decreased to 2.4 percent from 2.7 percent in July, while the consumer price index for pensioners decreased from 4.1 percent to 3.6 percent. The decrease in inflation was also observed in low-income, middle-income households, households with three or more children, and high-income households. The largest decrease of 0.7 percentage points occurred in middle-income households.

Purchasing power: Pensioners can buy more of several products

Due to the slowdown in inflation, more products became available to pensioners in August. In the case of milk, Parisian cold meats, potatoes, eggs, buns and chicken, the amount that can be purchased from the average old-age pension has all increased, which according to the latest data is HUF 232,952.

The price of pasteurized milk dropped from HUF 437 to HUF 423, so 551 liters could have been purchased from the August pension, compared to 532 liters in July.
The price of the Parisian cold cuts decreased from HUF 2,740 to HUF 2,650, which increased the amount that can be purchased from 85 kilos to 88 kilos.
The price of potatoes also dropped significantly, from HUF 429 to HUF 375, so 621 kilos could have been purchased from the August pension, compared to July’s 542 kilos.

On the other hand, a slight increase in the price of some basic foodstuffs was observed, such as the price of apples, flour and granulated sugar. As a result, fewer of these products can be purchased than in the previous month.