Economy 22 February 2024, 3:20pm

Inflation horror ends in Hungary, HICP only the 8th highest in EU

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Consumer prices went up 3.1% on average in the European Union in January 2024, while Eurozone inflation as 2.8% and Hungary's 3.7% CPI was the ninth highest in the bloc, Eurostat data showed on Thursday. We have also taken a look at how Hungary fared in January in a regional comparison. We have found that even with the spectacular retreat in the headline figure, Hungary's inflation remains the highest in various product groups in Central and Eastern Europe.

Kéthavi csúcsra kapaszkodott a forint, itt a 310-es euró

The euro area annual inflation rate was 2.8% in January 2024, down from 2.9% in December. A year earlier, the rate was 8.6%. European Union annual inflation was 3.1% in January 2024, down from 3.4% in December. A year earlier, the rate was 10.0%. These figures are published by Eurostat, the statistical office of the European Union.

The lowest annual rates were registered in Denmark, Italy (both 0.9%), Latvia, Lithuania and Finland (all 1.1%). The highest annual rates were recorded in Romania (7.3%), Estonia (5.0%) and Croatia (4.8%). Compared with December, annual inflation fell in fifteen Member States, remained stable in one and rose in eleven.

consumer prices rose 3.7% yr/yr in Hungary in january, the ninth highest reading in the eu.

In January, the highest contribution to the annual euro area inflation rate came from services (+1.73 percentage points, pp), followed by food, alcohol & tobacco (+1.13 pp), non-energy industrial goods (+0.53 pp) and energy (-0.62 pp).

Regional comparison

HICP - All items

You find two types of charts below. The upper ones compare inflation in Hungary and in the EU between January 2022 and January 2024. The lower ones put Hungary on a regional map so to speak, but on a shorter period: between August 2022 (when consumer prices really started to take off in Hungary) and January 2024.

In the CEE region, Hungary had the highest HICP until November last year, when Czechia took over (8.0% vs. Hungary's 7.7%). By last month, Hungary's annual inflation rate was "only" the sixth highest among the eight EU members states selected, with lower rates found only in Czechia (2.7%) and Slovenia (3.4%).

Food, non-alcoholic beverages

The turnaround in the region came about in October, when Hungary's food inflation (8.0%) was no longer the highest in CEE, with Poland (9.2%), Slovakia (9.0%), and Croatia (8.9%) reporting higher figures.

Alcoholic beverages, tobacco

Hungary's HICP in this product group remains well over the EU average.

In a regional perspective, Hungary lost its top ranking temporarily in November, but has since regained it in this product group, although its lead over Poland is very small.

Transport

Following a highly interesting 5.1% drop in transport prices in November 2023, inflation in this product group quickly and drastically rebound and reached 11% in January this year, versus the EU average of only 0.8%.

The yr/yr change in transport price was negative in Austria, Czechia, Poland, Romania and Slovakia, flat in Slovenia and only 1% in Croatia.

Restaurants and hotels

The annual index in this category hit its lowest at 11.1% after peaking at 31.2% in April, but picked up to 14.8% in January. There was an uptick in the EU average too, to 6.5% Jan from 5.8% in Nov.

Hungary was on the 2nd spot in November and on the 3rd in December in the CEE ranking, but got itself back on top last month.

Recreation and culture

The gap between the annual change in prices in this category Hungarian and EU widened to nearly 13 percentage points last April, but it narrowed to 4.9ppts in November. Although this particular index picked up both in Hungary and in the bloc, the acceleration in the former was bigger and the gap is now back at 6.6ppts, although it is a hair lower than in Dec (6.7).

In this category, Hungary has never 'given up' its leading position in CEE, and finished 2.1ppts higher in January than Romania which has been the runner-up since September.

Services

Services inflation peaked at 19.1% in Hungary in April 2023, more than three times as high as the EU average (6.1%). Since then the Hungarian figure has been dropping until December when it picked up 1ppt to 10.2%. It was followed by a moderate increase to 10.4%, while the EU reading rose a lot more, to 6.5% from 6.0%.

In this particular category, Hungary has not been the worst performer in CEE for the second consecutive month in January when it came in fourth (10..4%) behind Croatia (14.8%), Austria (13.2%), and Slovakia (12.7%).