Hungary’s inflation surprised analysts. This is not a pleasant surprise for Orban

Consumer prices in July in Hungary changed to date by +4.1% compared to yesterday year-on-year, and also by 0.7 percent on a monthly basis. This is a very surprising result. Analysts polled by Bloomberg expected inflation to stall at 4%.

“Food costs rose in July after the government scrapped compulsory supermarket discounts on essential products. Since June, the price of flour has increased by 38% and the price of sugar by 14%.“- indicates the group.

At the same time, core inflation, according to “Puls Biznesu”, was also higher than expected. It reached 4.7% in July, and was expected to increase to 4.4%. by 4.1 percent in June.

The rest of the article is below the video

In July, interest rates in Hungary decreased by a quarter of a percentage point to 6.75%. This was the fifteenth step in a row on monetary policyj. The increase in inflation means that there is no room for more movements of this type.

We will add that interest rates are currently the highest in the European Union, despite the series of cuts mentioned aboveabout which citizens can complain to the government Victor Orban. Therefore, it is not clear what will happen in the end in Hungary. The inflation reading has fueled speculation on the issue.

“The central bank of Hungary has a medium-term inflation target of 3 percent, with a possible deviation of 1 percentage point in either direction,” wrote “PB”.