Hungary: Inflation data is mixed bag – ING

Hungary’s headline inflation came in at 3.4% year-on-year in August, showing no change from July, notes Peter Virovacz, Senior Economist at ING.

Key Quotes

“The surprise in this reading wasn’t that headline inflation has remained above the 3% target for a third month but the fact that it did not show any softening.”

“Despite the headline reading overshooting the NBH's 3.3% forecast, we don’t see this as a game changer, as core inflation surprised on the downside.”

“The 2.2% YoY reading here was a 16-month low, showing that the recent upside surprise in inflation came from one-off factors, which will be ignored by the monetary authority.”

“For the rest of the year, we expect inflation to remain between 3.1-3.4% YoY.”

“In any event, we don't see the NBH changing its inflation forecast materially at next week’s meeting.”