Hungarian inflation slowed to 4.2% y/y in November - down from 5.1% y/y in October - and was significantly below the consensus expectation (of 4.7% y/y) and our forecast (4.6% y/y).
Inflation surprised on the downside and it is clear that inflation is easing significantly faster than earlier expected. It is not only lower energy prices that are pushing down inflation, but there is no doubt that the sharp slowdown in growth is also contributing to the downward trend in Hungarian inflation - as is the case in other countries in the region. This reinforces expectations for yet another 50 basis points rate cut at the Hungarian central bank's upcoming Monetary Council meeting.
