Bread price jumped 27.9 pc in one year – inflation is still very high in Hungary!

Consumer prices in Hungary grew by an annual 8.5 percent in March, quickening from 8.3 percent in the previous month, the Central Statistical Office (KSH) said on Friday. Month on month, inflation was 1 percent.

Food prices increased by 13 percent as the price of bread jumped 27.9 percent and poultry prices rose by 21.4 percent. In the category of goods that includes vehicle fuel, prices increased by 8.9 percent, with vehicle fuel prices up 11.4 percent. Prices of spirits and tobacco products increased by 7 percent.

Harmonised CPI, adjusted for better comparison with other European Union member states, was 8.6 percent. Core inflation, which excludes volatile fuel and food prices, was 9.1 percent. Analysts polled by MTI noted the big rise in core inflation, which they said indicated broad-based inflationary pressures.

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Péter Virovácz of ING Banks noted that the annual headline rate was lower than expected but the rate of increase continued to accelerate, adding that inflationary pressures were general.

The last time core inflation was above 9 percent was in the summer of 2001,

he noted.

Inflation is likely to peak above 9 percent in the middle of this year while averaging around 8.0-9.0 percent in the full year, he said. Interest rate hikes will continue, with a base rate of 8.00-8.25 percent expected by June, he said, adding that inflation was unlikely to return to the 3 percent target next year.