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Hungarian inflation continued to grow at the fastest pace in almost 14 years, keeping up pressure on the central bank and the government, which have scrambled to ease the burden on consumers and businesses.
Consumer prices rose 7.4% from a year earlier, more than the 7.2% median estimate in a Bloomberg survey, the Budapest-based statistics office reported on Friday. Prices rose 0.3% from November. The average inflation rate was 5.1% in 2021.
Inflation failed to slow despite a central bank forecast that price-growth had peaked in November. The data print may continue to pile pressure on the central bank after it raised the key rate by a cumulative 220 basis points in one of the European Union’s most aggressive monetary-tightening campaigns since mid-November.
Policy makers have kept the effective base rate unchanged for the past two weeks after the forint rose 4% year-to-date, outperforming all currencies in the period.
Spiraling inflation has also become a theme in the political campaigns before April 3 general elections and prompted Prime Minister Viktor Orban’s government to freeze mortgage rates and cap prices on staple foods, fuels and utilities.
Government moves to limit fuel, utility and food prices will shave up to 2.5 percentage points off of the consumer price index, Orban’s economic adviser Marton Nagy told Vilaggazdasag news website on Thursday, though he said price-growth may still average about 5% in 2022, compared with the central bank’s 3% medium-term targetCore inflation – a gauge that strips out the prices of volatile items like energy and food – could increase further into 2022, possibly to 6% during the summer, ING Bank Hungary’s Peter Virovacz Virovacz said; the core inflation rate was an annual 6.4% in December
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