The 0.9% year-on-year data in October marks a huge and unexpected decrease compared to 1.4% in September. The consensus forecast of economic analysts in a Portfolio.hu poll was for a 1.3% CPI for October.
This may prompt the National Bank of Hungary to lower the base rate, which is currently an all time low 3.4%, even more than analysts previously thought. However the danger of deflation, which was absolutely unthinkable in Hungary a few years ago, is now becoming real.
- Hungary inflation plummets to 0.9% in October – Huge surprise! (portfolio.hu/en)
- Central bank governor moots further base-rate cut, expanding bank growth scheme (politics.hu)
- Eastern Europe outlook stabilizes after five consecutive downward revisions (focuseconomics.wordpress.com)
- Emerging Markets Preview: Week Ahead (businessinsider.com)
- Hungary sees record low inflation in December -ministry (xe.com)
- Hungary 3-Year Yield Drops to Record on Rate Bet: Budapest Mover – Bloomberg (bloomberg.com)
- UPDATE 1-New Hungarian rate-setter sees room for more cuts -paper (xe.com)