Similarly to September, consumer prices were also lower in the month of October 2014. According to data compiled by the Hungarian Central Statistical Office, in October 2014 prices were 0.4 percent lower year-on-year. The key factor shaping inflation was the mandatory lowering of utility prices.

The third phase of utility price cuts has also contributed to the October statistics, as – in accordance with the decision of the National Assembly – the retail price of gas for private consumers decreased by 6.5 percent as of 1 April, that of electricity was lower by 5.7 percent as of 1 September and that of district heating was cut by 3.3 percent as of 1 October. Besides lower utility prices, the low inflationary environment prevalent in Europe has also influenced Hungarian prices. In October, falling crude oil prices on global markets also curbed inflation.

Along with families, pensioners have benefited to the largest extent from benign inflation, as the purchasing value of pension benefits increased together with that of wages. Higher incomes in real terms, in turn, boost consumption and savings.

Core inflation, which excludes the effect of lower utility prices and food and energy prices, was only slightly higher (1.5 percent).

In the coming months, the Ministry for National Economy is expecting inflation to pick up; for the next year, the Ministry sees moderate price increases that will be slightly above this year’s level, at 1.8 percent.

(Ministry for National Economy)