In May 2015, Hungary’s consumer price index showed an increase of 0.5 percent year-on-year. In the initial five months of the year, consumer prices were on average 0.6 percent below the level of the same period one year ago.

The price index is back in the green after eight months of decreases, thanks to the transitory correction in fuel prices, unchanged utility prices and the price increase of tobacco products due to a higher excise tax rate.

The Hungarian economy is still characterized by a subdued inflationary environment, caused mainly by external effects such as the drop in oil prices and the knock-on effect of disinflation in Western Europe.

Modest inflation increases predictability for enterprises. Low inflation enables lower interest rates, which help the financing of companies and new investment. These developments, in turn, boost economic performance.

In the coming months, modest price increases are expected, in line with the prediction of the Convergence Programme. These will stem from further rises in tobacco product prices, rebounding domestic demand and improved market transparency due to the EKÁER, Hungary’s road transportation control system.

(Ministry for National Economy)