Analysts guessed correctly, CPI-inflation indeed fell materially in April

HUNGARY - In Brief 10 May 2023 by Istvan Racz

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This time around, the analyst consensus, or more accurately the median analyst forecast in Portfolio.hu's poll, proved completely right: April CPI-inflation was reported at 0.7% mom, 24.0% yoy, the latter down from 25.2% in the previous month and from the 25.7% yoy recorded in January. This was the first materially big step downwards in the current inflation cycle, so the importance of this data is indeed great. We were also right in predicting 0.8% mom non-fuel inflation, but our rough estimate on fuel prices proved to be too optimistic, as the latter fell by only 0.7% in April. Thus, the yoy rate of non-fuel inflation fell to 23.6%, from 24.7% in March, and core inflation dropped to 24.8% yoy, from 25.7% in the previous month. Note: Yoy changes in %; Sources: KSH, own estimates So, the MNB was also right in predicting that the disinflation process was likely to accelerate from April. True, they have proven to be too optimistic, as they expected 0.3% mom, 23.4% yoy for this month in the latest inflation report. To be fair, the MNB's forecast was released in late March, whereas analysts prepared their forecasts just a few days ago, which is a major difference, of course. But all in all, the much-awaited disinflation process appears to have started in earnest at last. The conclusions regarding policies are the same as the ones we included in our previous note on the same subject, the one released yesterday.