Recent analysis: inflation jumped to 15.6%, food prices increased more than expected

Core inflation far exceeded expectations

Inflation that is much higher than expected, the substantial weakening of the forint, the public health product tax and the increase in the excise tax on tobacco products and alcoholic beverages, continued repricing due to the sharp departure of raw materials and energy costs in many product lines, primarily food, and the partial lifting of the freeze on household energy prices, We are raising this year’s and next year’s average inflation expectations to 13.4% and 11.9%. Inflation could be increased by another 4-5 percentage points if the price restrictions on certain foods and fuels are completely abolished, which could result in an average inflation of 14.3% this year and 14% next year. However, the abolition of price restrictions could also lead to a faster decrease in inflation (admittedly, from a much higher level), if the price of the affected products falls.

The Russian-Ukrainian war, as well as the sanctions against Russia, and partly as a result of the decreasing Russian gas deliveries, significantly override the inflationary – and economic – prospects, the effects of which cannot be fully estimated anymore. Since the outbreak of the war, gas, electricity, and oil prices have skyrocketed, which had already caused serious difficulties for the actors of economic life, and inflation will be further increased in the coming months by the increase in household energy prices above average consumption.

GWC