K&H Analyst Commentary: No surprises, but risks still exist

In August this year, annual inflation was 4.3 percent, and there was no change compared to July, according to the Central Statistical Office (KSH) data series on Tuesday. “The data are completely in line with market expectations, so there are no surprises this time,” said Dávid Németh, the chief analyst at K&H. He believes it is positive that core inflation, calculated without volatile energy, official and unprocessed food prices, fell below the 4 percent level in August, to be precise, it was 3.9 percent.

The expert said that inflation was pulled down in August by fuel prices, as well as seasonal price cuts in clothing products and other non-durable industrial goods. In addition, the price of bottled gas also steered the inflation indicator in a favorable direction. At the same time, inflation was accelerated by the rise in the price of tobacco products and alcoholic beverages, as well as the increase in the prices of services. Among the latter, the price increase that has been going on for months in the so-called Horeca segment, i.e. services related to the hospitality industry, hotels and catering, continued. “After the increase in January and February, rents also showed a significant increase in price of 1.6 percent in August compared to the previous month,” he added. The picture is different for food, as the price of unprocessed seasonal vegetables and fruits decreased in a monthly comparison, while processed foods, especially meat products and dairy products, saw a more serious increase in price.