Annual inflation fell slightly more than expected in March

By: Trademagazin Date: 2025. 04. 08. 12:27

In March 2025, the annual inflation rate in Hungary decreased to 4.7%, which exceeded analysts’ expectations. Although the rate of decrease is moderate, the trends observed based on monthly data show that inflationary pressures have noticeably eased in several sectors.

More significant slowdown in price increases

While annual inflation was still 5.6% in February, it was only 4.7% in March, and prices did not change on a monthly basis. This figure is more favorable than the market consensus (0.3%) and supports the continuing trend of decreasing inflation. Core inflation also decreased: from 6.2% in February to 5.7%.

Examining the structure of prices, the decrease in the rate of price increases for food, fuel and services was particularly striking. Fuel prices, for example, fell by 4.1%, while the growth in services, which had previously shown high monthly price increases, fell from 1.2% to 0.3%. In the food segment – which accounts for more than 30% of the consumer basket – there was no price increase in March, while in February a 1.2% increase was registered.

Outlook: the effect of price regulation is only just beginning

The full effect of the government’s price regulation measures in March is expected to be fully reflected in April’s inflation data. The first effect of the so-called “margin stop” introduced in March is encouraging: not only did prices decrease in the affected product groups, but there was no “compensatory price increase” in other products, which often occurs in similar situations.

According to experts, if the margin freeze persists in the long term and the pressure to increase prices does not spread to other sectors, annual inflation could fall below 4% in April. According to analysts at MBH Bank, the probability that the annual inflation average will remain below 5% in 2025 has increased.