We see December's inflation at 6.5 % y/y

Today the Central Statistics Office (KSH) will publish December’s CPI. The market consensus expects 6.6 % y/y rise from November’s 6.4 % y/y.
Our view: We are little bit more optimistic and believe that December’s inflation rose only slightly, by 0.1% m/m or 6.5 % y/y. According to our view the price rise was particularly driven by the seasonal rise in food prices while fuel prices had the opposite effect. Nevertheless we do not expect any significant market impact of this figure. We believe that from the market point of view more interesting will be this year’s inflation, which will be affected by further price deregulation as well as tax rises and might thus influenced monetary policy of NBH. We expect that inflation will reach 8% already at the end of Q1 this year.