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Bloomberg
Hungarian inflation continued to accelerate as the effects of record pre-election spending, weaker currency and a surge in oil prices following Russia’s invasion of Ukraine fed through to prices across the economy.
Consumer price rises an annual 8.5% in March, the highest level since 2007, the Budapest-based statistics office said in a statement. The median estimate in a Bloomberg survey was 8.8%. Core inflation, which excludes volatile energy and food prices, jumped to an annual 9.1%, the fastest pace in almost 21 years.
The forint has been the hardest-hit emerging-market currency since Russia invaded Ukraine on February 24, weakening almost 5% against the euro. It has traded hectically this week after Premier Viktor Orban secured his fifth term at general elections last Sunday and after the European Union said it would start a rule-of-law mechanism that may lead to a freezing of its EU funds.
Record pre-election spending as well as supply disruptions from the war boosted prices across the board, including durable consumer goods and services.
Hungary’s central bank kept the one-week deposit rate unchanged on Thursday at 6.15%, already the highest key rate in the EU, despite a 3% plunge in the forint in the last week following the EU decision threatening billions of euros funding.