It's astonishing what service companies in Hungary are doing with their prices
The MNB traditionally publishes its own measures of underlying inflation developments after the official release of inflation data. These are close in nature to the core inflation index, so it is not surprising that they show a similar picture: they are higher than the official inflation indicator, the consumer price index, but they show a downward trend for the time being.
The inflation of sticky-price products fell by 0.3 percentage points and the annual price rise of core inflation excluding processed food prices (formerly demand-sensitive inflation) declined by 0.5 percentage points relative to the previous month. The former stood at 5.8% and the latter at 5.9% in April.
In its assessment, the MNB notes that the rise in prices compared to the previous month was above the historic levels seen this time of year in the case of inflation and core inflation. The price of the basket calculated excluding fuel and regulated product prices was up by 0.7% from March, while month-on-month core inflation excluding processed food, which better reflects underlying developments was 1.0%.
The strong rebalancing is the result of service companies raising their prices looking backward (i.e. based on past inflation). Here, the price increases are so significant that they exceed even the April hikes seen in the rough inflationary period of the past two years.
Annual price index of market services remained 10.2%; and as a result, the fall in annual price growth, started in last June, stalled. Prices rose by 1.6% month-on-month, which primarily reflected backward-looking repricing of banking services.
Címlapkép forrása: Shutterstock
