Headline CPI-inflation to decelerate further on fuel prices in January

HUNGARY - In Brief 11 Feb 2019 by Istvan Racz

CPI-inflation data for January is due tomorrow morning. Portfolio.hu says its analyst consensus is 2.7% yoy for the headline rate, unchanged from December. This would imply 0.3% mom.We do not quite agree with this consensus. Non-fuel inflation was 0.2% mom in January 2017 and 2018 alike, following 0.3% mom in 2016. We expect this same range to repeat itself this time. In addition, the wholesale prices of fuel fell 2.5% mom in January. Expecting the same drop for retail fuel prices, together with 0.2-0.3% mom for non-fuel items would make 0-0.1% mom for the headline rate. In yoy terms, the implication would be a drop to 2.4-2.5%, which happens to be our forecast.Importantly, the big difference between this and last Januaries is once again in fuel prices, which rose by 1.5% in January 2018, against falling early this year.

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