Actual (Apr): 5.7% y/y
Consensus: 5.5% y/y
Previous (Mar): 5.5% y/y
The monthly growth of consumer prices in April was 0.8 pct., repeating the prints from the previous two months. The year-on-year inflation acceleated to 5.7 pct. The headline index was mostly driven by fuels, food and clothes. Food prices increased by 0.8 pct. m/m, keeping pace from the previous month and influenced by egg and seasonal food items. Prices of motor fuels picked up by 3.4 pct., prices of clothing by 2.4 pct due to seasonal changes. Still, there is a notable impact of the February tax hike in the prices of tobacco that added 1.1 pct.
The April figures are higher than forecast and show that the March slowdown in inflation was not a start of a downward trend. Moreover, the core inflation remains high at 5.1 pct. Hungary may now be somewhat closer to the IMF/EU credit deal than a month ago, but on the other hand, the Eurozone debt crisis is intensifying after the Greek election. Thus, risk aversion is likely to worsen rather than improve. We expect the MNB to keep interest rates stable, a cut is unlikely to come any time soon.