March consumer prices – GKI reaction

The energy price shock and uncertainty caused by the Iranian conflict and the closure of the Strait of Hormuz were already partially incorporated into fuel prices in March. The price of vehicle fuels decreased slightly compared to the previous year (at that time gasoline was 604 forints/liter) due to the base effect, but increased by 4.6% in monthly terms. The larger impact of the energy price shock was mitigated by the introduced protected prices.

Development of the main components of the consumer price index, March 2025 = 100%

Source: KSH

The stagnation of food prices and the The decrease in the prices of processed and unprocessed food within the country indicates that the margin freeze and the year-on-year strengthening of the forint also curbed price increases. The increase in taxes on alcoholic beverages and tobacco products caused the above-average price increases. Clothing showed great volatility over the past year (this segment is also characterized by seasonality), but overall the rate of price increases was slower than that of the overall price index. Services and Durable consumer goods, on the other hand, increased by 4.1 and 2.7 percent annually. In the case of the latter, the longer-term strengthening of the forint moderated the decline, while the increase in the costs of domestic enterprises and the possible cross-pricing resulting from the margin freeze increased prices.

The overall slightly rising, but still low, inflation rate was due to several factors. The decrease in inflation was due to the stronger forint in the annual comparison (it appreciated by 5.2% against the euro) and the decrease in household inflation expectations (the latter was also confirmed by the GKI’s March business survey). While the increase in the price of energy carriers and the unchanged higher price index of services caused the increase in the inflation rate.