The Hungarian Central Statistical Office indicated that inflation in July rose to 13.7% YoY. from 11.7% in June and topped analysts' expectations of 13.1%.
- Hungary's inflation reached the highest level since 1998, however the Hungarian CPI index is not fully reliable, partly due to the introduction of maximum prices for basic products and fuels by politicians;
- CPI inflation for Hungary is only 'formally' lower than in Poland. The prices of groceries in Hungary are rising at 'crazy pace'. In July, an over 27.0% increase was recorded - for comparison, in Poland it amounted to “just” over 15.0%;
- From November 2021, the Hungarian central bank raised rates by 795 basis points, which is a record in the EU. The last, July rate hike in Hungary amounted to 200 bp. Despite this, inflation continues to rise, and the Hungarians have to wait for the effects of interest rate hikes. The money supply in Hungary remains high, which supports inflation and limits the impact of interest rate increases.
EURHUF, interval H4. The forint has depreciated against the euro by more than 6% since the beginning of 2022. The temporary appreciation of EURHUF slowed down around 390 HUF, which coincides with the 38.2 Fibonacci retracement and February highs. Consolidation at these levels may herald a continuation of the depreciation of the Hungarian currency. The forint is also weakened by the high fiscal deficit, the deterioration of the current account balance and the lack of agreement regarding transfers of the EU funds from the National Reconstruction Program. Source: xStation5
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