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Inflation in Hungary remains at 14-year high as cost pressures persist

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Hungarian inflation continued to grow at the fastest pace in nearly 14 years, keeping pressure on the central bank and the government as they struggled to ease the burden on consumers and businesses.

Consumer prices rose 7.4% from a year earlier, more than the median estimate of 7.2% from a Bloomberg survey, the Budapest-based statistics office reported on Friday. Prices rose 0.3% from November. The average inflation rate was 5.1% in 2021.

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Inflation has not slowed despite central bank forecasts that price growth peaked in November. The data print could continue to weigh on the central bank after raising the policy rate by a cumulative 220 basis points in one of the European Union’s most aggressive monetary tightening campaigns since mid-November.

Policymakers kept the effective base rate unchanged for the past two weeks after the forint rose 4% year-to-date, outperforming all currencies over the period.

Soaring inflation has also become a theme of political campaigns ahead of the April 3 general election and prompted Prime Minister Viktor Orban’s government to freeze mortgage rates and cap the prices of staple foods, fuels and public services.

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Government measures to limit the prices of fuel, utilities and food will reduce the consumer price index by up to 2.5 percentage points, Orban’s economic adviser Marton said on Thursday. Nagy told the Vilaggazdasag news site, although he said price growth could still average around 5% in 2022, compared to the central bank’s medium-term target of 3%. ; the core inflation rate was 6.4% in December

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