BUDAPEST: Hungary's headline inflation rate slowed to 4.1 percent year-on-year in December from 4.3 percent in November, the Central Statistics Office (KSH) said on Friday.
The figure came in below analysts' forecast for 4.3 percent in a recent Reuters poll.
For the full year in 2011, the headline inflation figure came to an average of 3.9 percent, with food prices up 6.6 percent and household energy up 5.7 percent for the whole year, the KSH noted.
MARKET IMPACT
At 0824 GMT, the forint traded at 309.30 versus the euro, a touch weaker than 308.75 before the data.
KSH STATISTICIAN BORBALA MINARY
"Fuel prices were a lot more favourable than this time last year. In December 2010 there was a slight increase in prices, and now a small decrease. The same is true to food prices, where pre-Christmas special offers pulled prices lower.
"Pork prices were somewhat higher but other food groups, like cooking oil or flour, pulled prices lower.
"In December, there was a slight decrease in diesel prices and also in late November, which counted toward December - but since then, there was a hike at the end of December and January so far has seen a very substantial hike as well.
"That, and the VAT hike will probably result in a jump in the headline figure in January as there are few factors to counterbalance that."
ANALYST COMMENTS
SANDOR JOBBAGY, CIB
"We saw food prices rising at a lower-than-expected pace on m/m terms and pressure from fuel prices also eased on a monthly basis "Generally, prices showed benign movements compared to November. At the same time this does not help the 2012 outlook much: January inflation is likely to jump close to 5 percent y/y on the back of the higher VAT, weaker forint and ongoing or strengthening energy price pressures."
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