Data on industry, hotels and inflation

HUNGARY - In Brief 08 Jun 2021 by Istvan Racz

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Industrial output rose 59.3% yoy but fell 3.2% mom in April, both on sda basis. The first one was spectacular, but there was a massive base effect, because of a Covid lockdown in force last April, of course. The second one was quite poor, but there was a Covid lockdown in force this April, too. The good news, as told by the yoy number, is that this year's April lockdown had a very much smaller negative impact on output than last year's. This is the same message as the one reflected by the recently published April retail sales data.One area where the two Aprils were, unfortunately, not so much different, was tourism and the hotel business. On the one hand, the number of guest nights spent in hotels jumped by an impressive 169% between these two periods, but on the other hand, guest nights were still 91% below the April 2019 level in April this year, so effectively close to none both in 2020 and 2021.By the way, May CPI-inflation data is due for release tomorrow. Analysts, surveyed by Portfolio.hu, expect a yoy headline rate of 5.2-5.4%, so a bit further up from 5.1% yoy in April. This would require 0.6-0.8% mom for non-fuel inflation, which we find a bit exaggerated. So for what it is worth, we expect 5-5.2% yoy for the headline rate. The basis for our relative optimism is the fact EURHUF (euro) appreciation fell further to 0.9% yoy in May from 1.3% in April and 6.5% in Q1. And that slowdown by the pace of forint depreciation may have had a favourable initial impact on import prices.