Inflation will remain in 2024 as well

By: Trademagazin Date: 2023. 12. 29. 18:08

This year was determined by inflation, which remains on the table. The disinflation process may continue at the beginning of next year, but the pick-up in household consumption will bring new inflationary pressure, so in the second half of 2024 inflation is expected to be around 5 percent, which is still a high level compared to the target. The forint may be relatively stable next year, but it may still react sensitively to various turbulences.

Although inflation reached decade-long highs in the first half of the year, as expected, a rapid slowdown came in the last months of the year. Based on the current outlook, the rate of price inflation may decrease further – roughly until April, which would mean an indicator looking back at twelve months of a little under 5 percent in the third or fourth month of the year. At the beginning of 2024, the increase in the excise tax on fuels will slow down the disinflation process. At the same time, among other things, the inflation of food and consumer durables may further slow down – Dávid Németh, Macroeconomic Analyst of the Year, K&H’s leading analyst, presented his forecast.

One of the most important questions for the next year is how the revival of domestic demand, including residential consumption, will affect prices. This results in inflationary pressure, which may prevent a further slowdown, so this indicator may remain at a level of around 5 percent in the second half of 2024.