Food prices were up by 0.6 percent, the price of alcohol and tobacco climbed by 1.9 percent and service prices rose by 1.1 percent. Consumer durable prices were flat and household energy prices decreased by 0.1 percent.

Seasonally-adjusted core inflation, which excludes volatile fuel and food prices, was 1.2 percent. In a month-on-month comparison, consumer prices fell by 0.4 percent in August.

Prices in the category of goods that includes vehicle fuel dropped by 1.7 percent and food prices fell by 0.3 percent because of cheaper seasonal foods. Clothing prices declined by 1.5 percent on summer clearance sales. Consumer durable prices and household energy prices were flat.

The price of services inched up by 0.1 percent. KSH department head Borbála Minary said the expected rise in tobacco prices from September would impact CPI in the coming months.

Takarekbank analyst Gergely Suppán said CPI was a little lower than expected as the increase in service prices was moderate. He put average annual inflation at 0.5 percent. ING Bank chief analyst Péter Virovácz said inflation was likely to pick up in the coming months because of base effects and higher taxes on tobacco and vehicle fuel. He projected average annual inflation of 0.6 percent.

The economy ministry said the most important impact was made by significantly lower fuel prices compared to the same period of 2015, which reduced the index as a whole by 0.9 percentage point.

Republished with permission of Hungary Matters, MTI’s daily newsletter.