In May 2016, consumer prices were down on average by 0.2 percent year-on-year. In comparison to the same period of the previous year, the price of pork fell considerably, by some 20 percent, which proves that households have been the ultimate winners of a reduced VAT rate.

The 0.2 percent price decrease was mainly the result of low oil prices and deflationary effects from Europe. Price stability helps preserve the value of wages and pensions. Accordingly, it helps increase household disposable income which in turn fuels consumption and economic growth.

Compared to May 2015, consumer prices edged down on average by 0.2 percent. In this period, fuel prices saw the largest decrease, while the largest price increases were registered regarding alcoholic beverages and tobacco products, as these rose on average by 2.2 percent.

Recent price statistics repeatedly show that subdued inflation has prevailed within the Hungarian economy. While consumer prices had risen by 5 percent in 2010, thanks to multiple utility price cuts they were up by only 1.7 percent in 2013 and they remained flat in 2014 and 2015, which helped preserve the purchasing value of the forint.

(Ministry for National Economy)