Actual (Nov): 0.7 % m/m, 4.3 % y/y
Consensus: 4.2 % y/y
Previous (Oct): 0.7 % m/m, 3.9 % y/y
The inflation accelerated further in November, it came in a touch above the market consensus. The CPI was driven upward mainly by non-core items, food and fuel, but also core inflation has slightly increased to 3.1 pct. The fuel price surged on three factors: an excise tax hike, crude oil rise and the weaker forint. The food prices accelerated and rose by 1.2 pct over the previous month. On the other hand, services and durable goods had a negative influence on the price index.
The MNB has already started to tighten interest rates and the inflation data show that more hikes are likely in the pipeline. The growth of food and fuel prices, boosted by the excise tax hike, may influence inflationary expectations. It is a caution for the central bank as the core inflation figures are already elevated. However, the key argument to lift interest rates further is risk aversion on global markets that is weighing on the forint. These factors outweigh the worsening economic outlook.