The level of decline is the first in almost three years.Continue reading
It has been two and a half years since producer prices in industry last increased at such a low rate, giving a huge boost to the battle against inflation. What was expected to happen for consumer prices in October has already happened in the industry sector in June, reports Világgazdaság.
Industrial producer prices were on average 6.4% higher in June than a year earlier, the lowest manufacturing price increase in two and a half years, according to data released by the Hungarian Central Statistical Office.
The inflation rate is falling month by month, although the improvement is not yet spectacular in the food sector, where it was 28 percent in June, while the single-digit rate has already been achieved in industry.
This is important because if price pressures in manufacturing ease, this could eventually have an impact on consumer prices.
This is already showing signs, as in July inflation was already below 20 percent. According to Gergely Gulyás, Minister of the Prime Minister’s Office, there is a good chance that it will fall to 11-12 percent by September and below 10 percent by October, closing the gap between regional and domestic indicators.
In the case of industrial inflation, the picture is always clouded by the fact that domestic sales prices rose by 29.8 percent, while export sales fell by five percent. The statistical office points out that the large difference is mainly due to the fact that domestic sales prices of the energy industry, which is a major producer of the domestic market, were much higher than a year earlier, while export sales prices have already fallen.
Industrial producer prices were also affected by higher raw material prices and production costs, as well as by the strengthening of the Hungarian currency, the forint, against the euro.
Compared with the previous month, domestic sales prices fell by 2.4% and export sales prices by 0.7%, so overall industrial producer prices declined by 1.3%.
At the same time, the government plans to take further measures in the future that will also bring prices down, such as the mandatory discount rate, that will be 15% from August, the improvement of the price monitoring database or the extension of the inspections by the Hungarian Competition Authority.
Via Világgazdaság, Featured image via Facebook/Szijjártó Péter
