"It is self-explanatory that weather and climate effects (such as drought or frost damage etc.) influence the price of agricultural products, and in turn, they may impact Hungary's inflation rate as well, Finance Minister J�nos Veres replied to inquiries at a press conference.However, certain other factors, including market competition, trading channels and the impact of free trade in the EU (which helps even out price differences) may help alleviate the inflationary effect of significant food price hikes (as seen in the price of corn, for instance), Veres added.
According to Veres, the Finance Ministry will not review Hungary's 7.0% 12-month inflation forecast until the release of September CPI figures (in early October); the reason for this being that the distortion effect of last year's government measures will disappear from the base in September.
Analysts are predicting approximately 7.5% inflation rate for Hungary in 2007. Whether the Finance Ministry decides to raise its previous forecast or not is not going to have a significant impant on this year's budget."
Source:
Portfolio Online Financial Journal
31.07.2007