Eurostat looking into Hungarian inflation data
There was no immediate reply from Hungary's statistical office to an emailed request for comment on Eurostat's remark.
We have reported earlier today that the HCSO's calculation method for energy inflation has already peaked the interest of foreign market players, and concerns were raised about the reliability of official data.
Reuters recalled that that Hungary's headline inflation dipped into single digits in October (9.9% yr/yr) for the first time since April 2022, undershooting market forecasts for a 10.4% increase (the consensus estimate in a Portfolio survey was 10.3%).
That has drawn accusations from some local economists this week that the statistics office was aiding the agenda of nationalist Prime Minister Viktor Orbán's government, which has campaigned for months on curbing inflation below 10% by the end of the year. Orbán faces European parliament elections in 2024, the news agency added.
In a statement on Wednesday the statistics office firmly rejected the accusations, saying its calculation of inflation data was "fully in line with European statistical guidelines."
The HCSO implemented a methodological change in August 2022 to take account of changes in government subsidies for household electricity and gas prices.
It added that the methodological change was adopted when energy prices were rising, and the methodology applied has been unchanged ever since.
Changing the measurement methodology to show a stronger decline in prices would be a professionally questionable approach, which has not even been considered by the Office,
it said.
Eurostat said it was in "regular dialogue with all EU member states' statistical offices on matters relating to harmonisation and development of HICP (Harmonised Index of Consumer Prices) statistics" and also regularly verifies compliance with the methodological guidelines.
In the case of Hungary, Eurostat is in discussion with HCSO on the calculation method for energy inflation,
its press office told Reuters in an emailed response to questions.
"This must be seen in the context of Eurostat's aim to further harmonise energy inflation measurement across countries and to strengthen the recommendations of the HICP methodological manual."
It said the talks with Hungary's HCSO started this autumn, but it was unclear when they would be concluded.
Asked whether the outcome of the talks could lead to a revision of past Hungarian inflation data, Eurostat said these are "in principle allowed, but also very rare."
It did not release any more details on the talks.
The press office of the National Bank of Hungary, which has pledged further cautious rate cuts as inflation eases, has also replied to an enquiry by Reuters. It said any methodological changes in measurement of Hungarian inflation are validated and regularly audited by Eurostat. These controls, in our view, ensure that Hungarian statistics office releases provide a "reliable picture" of inflation in compliance with international standards and regulations.
Regardless of the stats office's reaffirming statement, some economists are concerned not just about a possibly compromised reliability of official data, but also about the potential fallout. Tatha Ghose, analyst at Commerzbank, remarked that the most serious concern is "pressure from the top", i.e. political pressure exerted on the HCSO to publish more favourable figures. He admits, though, that "it is always difficult for outsiders to assess to what extent these allegations are true, or if the magnitude of distortion to the data (that is being implied) is significant." He mentioned Türkiye as a country where the reliability of official GDP and CPI statistics have been widely questioned or Russia where statistics are utterly unreliable by design.
Cover photo: Getty Images
