Consumer prices rose 15.6% in August, breaking another 24-year record in Hungary. Food prices were the most affected by the increase. Most economic experts are not optimistic about the future, and it is difficult to predict the impact.
As an article in Világgazdaság points out, their analyst consensus forecast a higher rise with 16 percent for August. According to Gábor Regős, senior analyst at the Macronome Institute, the lower figure indicates that the impact of the tax hikes has already partly been reflected in the July data.
However, the analyst added that
the high inflation level is mainly due to soaring energy prices, as well as the weak forint exchange rate, the drought, and supply chain disruptions due to the war.
The Russian-Ukrainian war and declining Russian gas supplies due to the sanctions are also materially overriding the inflation outlook, said Gergely Suppan, senior analyst at Magyar Bankholding. Moreover, the impact of commodity and energy prices remains an upside risk, the expert said. Suppan believes that inflation could reach 22-25 percent in the absence of measures on fixed prices.
Commenting on the economic outlook, ING senior analyst Péter Virovácz said the expiry of the capped price on fuel in October also raises serious inflation questions. If the government does not extend the measure and market prices return, the Hungarian inflation rate could rise above 20 percent by October. The analyst expects average inflation in Hungary to be around 14 percent for the whole of 2022, but it could be higher next year, at around 15 percent, he added.
The investment director of Amundi Fund Management spoke of a much gloomier outlook. According to Péter Kiss, inflation in Hungary could peak at 20.5 percent in October.
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