In a month-on-month comparison, prices eased by 0.7%, KSH said. The economy ministry said that the -0.2% annual inflation for 2014 fell in line with ministry projections. Families and pensioners have benefited most from the government’s success at reducing inflation, which has resulted in the increased purchasing power of wages and pensions, it said.

A major drop in fuel prices are among the factors that influenced inflation in the last month of 2014, it said, noting that the largest drop of 11.7% in the full year was recorded in the price of household energy.

Analysts interviewed by MTI said consumer inflation was dragged down by falling fuel and food prices in December, adding that deflation could continue for several months yet. The central bank (NBH) may consider relaunching rate cuts, they said.

Senior analyst Gergely Ürmössy of Erste Bank said they reduced their 2015 inflation forecast to 0.4% in the light of the December figure.

Ürmössy expects the NBH to change its communication after the March inflation forecast in order to prepare the ground for another series of rate cuts. Senior analyst András Balatoni of ING Bank added that price expectations continued to lessen both in the service and the industrial sectors, which shows that lower fuel and food prices have a secondary effect, causing a general decline in consumer prices.

The analyst said the weaker forint exchange rate is here to stay, predicting a forint rate of 315-324 for the coming 1-2 months.

Source www.hungarymatters.hu

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