BUDAPEST: Hungary’s consumer prices fell on average last year, failing to meet the central bank’s inflation target and underpinning the outlook for persistently loose monetary policy. Consumer prices fell 0.1% on the year in 2015 compared with a 0.2% fall in 2014, remaining well below the central bank’s 3% inflation target, data from the central statistical office KSH released Thursday show.
Prices fell last year due to lower fuel and household energy prices, the latter the result of government measures, while all other consumer goods and services prices tended to climb higher, KSH statistician Borbala Minary said.
The National Bank of Hungary amended its policy tools Tuesday to loosen monetary conditions further–in an effort to boost growth amid persistently low inflation. In December alone, inflation was 0.9% on the month, the KSH said. That met analysts’ expectation in a Wall Street Journal poll and was the highest reading since November 2013.
Even if inflation has started to accelerate, inflation won’t climb above 2% on average in 2016 and the 3% inflation target could only be reached in the second half of 2017, Raiffeisen Bank analysts said. Due to lower fuel and food prices, prices fell 0.3% in December from November as against analysts’ forecast for a 0.2% rise.
The core inflation rate, which excludes volatile raw food and oil prices, tracking underlying inflation trends, was 0.1% on the month and 1.4% on the year in December, not much different from 0% on the month and 1.4% on the year in November. In December 2014, the annual core inflation rate was 0.9%. In the whole of 2015, the core inflation rate was 1.2%, versus 2.2% in 2014.
