In July 2021, the year-on-year price index decelerated from 5.3% in the previous month to 4.6%. The decline is mainly due to a base effect: in 2020, monthly inflation jumped to nearly 4% in July and remained high until October. Compared to the previous month, consumer prices rose by 0.5% in July, the lowest month-on-month price index in 2021 so far.
Compared to June, the price level of foreign travels (11.6%!), vehicle fuels (4.2%), household maintenance items (4.1%) and room furniture (2.8%), among food stuffs, cooking oil (3.8%) and poultry meat (2.1%) soared most drastically. In the case of most products and services, the weakening of the forint exchange rate and the rise in world oil prices, as well as other world economic trends – e.g. strengthening Chinese demand for raw materials and certain foods – played a role in the high price index. In addition, the expansion of domestic demand also contributed to the rapid rise in prices. The importance of the latter is highlighted by the fact that Hungarian inflation is the second highest among the EU countries, even though the latter are affected by the same external effects as the Hungarian economy.
In August, prices are likely to increase at a rate similar to July, which may be followed by a rise above 5% again from September. Kopint-Tárki revises its annual inflation forecast for 2021 to 4.7% and for 2022 to 4.4%.
