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Hungary’s April Inflation Rate Highest in EU

Hungary Today 2021.05.20.

The annual inflation rate in Hungary soared to 5.2 percent from 3.7 percent the previous month. This is the highest annual inflation rate among EU member states in April, Portfolio reports, based on data published by Eurostat.

Hungary’s 5.2% purchasing power decline is slightly above the 5.1% rate recorded in Poland, and well above the third-highest in Luxembourg (3.3%) .

Up until April, Hungary was consistently the second, behind either Poland or the Czech Republic each month. However, this time the inflation rate (an eight year high for Hungary), managed to surge above market expectations of five percent.

On a monthly basis, consumer prices went up 0.8 percent, following a 0.7 percent gain in March.

In light of the new record high inflation, it is unsurprising that on Monday, Hungary’s central bank announced a possible hike in its base rate in June to tame inflation.

National Bank Policy Makers Could Weigh Rate Hike in June
National Bank Policy Makers Could Weigh Rate Hike in June

Hungary's monetary policy will enter a new phase from June as the economy fully reopens, deputy governor Virág said.Continue reading

The euro area annual inflation rate was 1.6% in April 2021, up from 1.3% in March. A year earlier, the rate was 0.3%. European Union annual inflation was 2.0% in April 2021, up from 1.7% in March.

In April, the biggest contribution to the annual euro area inflation rate came from energy (0.96 percentage points), followed by services (0.37 pp), food, alcohol and tobacco (0.16 pp), and non-energy industrial goods (0.12 pp).

Featured photo illustration via Pixabay