By Margit Feher
BUDAPEST–Hungarian consumer prices fell deeper in June than expected, underpinning the central bank’s stance to keep monetary conditions loose for long.
Consumer prices fell 0.2% on the year in June, data released Friday showed, after an also 0.2% annual decline in May and more than the average forecast of 12 analysts in a Wall Street Journal poll for a 0.1% drop.
That was still a far shot from the central bank’s 3% medium-term inflation target. The central bank said it expects headline inflation to approach the target “only” in the first half of 2018.
In June, consumer prices rose 0.2% on the month, the central statistics office KSH said, less than analysts’ forecast for a 0.3% increase.
Food and fuel prices mostly drove price developments, KSH statistician Minary Borbala said. Food prices fell 0.5% on the month and decreased 0.4% on the year as vegetable prices fell more in June than a year earlier with seasonal produce hitting the markets in large quantities, Ms. Minary said. Fuel prices rose 3.2% on the month and fell 10.4% on the year.
Core inflation, which excludes volatile raw food and oil prices, tracking underlying inflation trends, was 0.1% on the month and 1.2% on the year in June, versus a downwardly revised 0% monthly rate and an also 1.2% annual increase in the previous month. In June 2015, core inflation was 1.3% on the year.
Write to Margit Feher at margit.feher[a]wsj.com; Twitter: [a]margitfeher
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