Official Annual Inflation at 2.1% in Hungary

Hungary's annualised consumer price index rose to 2.1% in April from 1.8% in the previous month, data released by the Central Statistical Office (KSH) show.

Food prices rose 1.5%, but fell 0.9% excluding the price of eating out. Pork prices fell 8.5% and potato prices dropped 11.4%, but fresh fruit prices rose 7.0%. Household energy prices edged down 0.4% as piped gas prices slipped 3.1% but electricity prices increased 2.1%.

Consumer durable prices rose 2.7%. Motor fuel prices inched up 0.1%. The government rolled out petrol and diesel price caps for Hungarian motorists early in March. Prices of spirits and tobacco products increased 4.1% and clothing prices rose 0.8%. Service prices were up 4.0%.

CPI adjusted for better comparison with other European Union member states was 2.6%. Core inflation, which excludes volatile fuel and food prices, was 2.2%. The CPI calculated with a basket of goods and services used by pensioners was 1.8%.

In a month-on-month comparison, consumer prices edged up 0.4%. Food prices, excluding the price of eating out, were flat. Service prices climbed 0.7%, household energy prices were down 0.9% and motor fuel prices rose 1.7%.

Erste Bank chief analyst Orsolya Nyeste said headline CPI was just a hair over the bank's 2% projection. The increase in food prices was "modest" as a government-mandated cap on markups for a range of products dropped out of the base period, she added. She was of the opinion that CPI could rise over 5% in the last third of the year but put average annual inflation under 4%.

ING Bank senior analyst Péter Virovácz said headline CPI was a little under the consensus. He added that businesses were holding off on raising retail prices even though March factory gate prices showed their higher costs. He said the impact of the conflict in the Middle East had not yet passed through to food prices, but added that higher artificial fertiliser prices could raise costs for farmers.

CPI could rise to around 3% in the summer and reach 4.0-4.5% at year-end, according to ING Bank. The lender's analysts put average annual inflation at 3.0-3.5%.