Hungary: Inflation hits five-year high - ING

Peter Virovacz, Senior Economist at ING, notes that Hungary’s headline inflation came in at 3.6% YoY in September, in line with their forecast.

Key Quotes

“The market was expecting an acceleration but not to this extent. Still, the reading didn't exactly catch the market off guard. While the headline reading is above the National Bank of Hungary's 3.5% forecast, we don’t see it as a game changer.”

“The central bank emphasises that it wants to see inflation reach the target in a sustainable manner, which means as long as core inflation remains below the 3% target, it will consider its loose policy stance to be perfectly justified. Core inflation came in at 2.4% YoY in September.”

“In 4Q18, we expect inflation to remain around recent levels, but the oil market presents huge uncertainty.”

“Our base case scenario is 2.8% YoY, while we forecast a jump to 3.3% on average in 2019.”