In September 2015, consumer prices were on average 0.4 percent lower, year-on-year. Along with the significant drop of fuel prices, the free school book scheme of the Government launched last year also contributed to the change in the overall price level.

Thanks to falling prices, wages and pension benefits are rising in real terms which in turn increase disposable income at households, fuelling consumption and economic upturn.

Inflation was also negative in the initial nine months of the year, by 0.3 percent on average, in line with the prior expectation of the Ministry for National Economy. In this period, the third phase of public utility price cuts and lower oil prices were the main determinants. External price pressures were also subdued within Europe; these mainly affected the prices of processed foods and industrial products.

The latest data also confirm that the Hungarian economy continues to be characterized by benign inflationary processes. Full-year inflation can be expected around 0 percent, as predicted by the Convergence Programme.

(Ministry for National Economy)