Expect falling headline inflation data for August tomorrow

HUNGARY - In Brief 09 Sep 2024 by Istvan Racz

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KSH is set to publish its CPI-inflation data for August tomorrow. Essentially everyone expects that the headline rate will move downwards from July's actual 4.1% yoy. The MNB, as we reported earlier, predicted 3.4% yoy in its Q2 inflation report (true, that forecast also included 3.8% yoy for July, overshot by the actual number by 0.3%-point):   Analysts, asked by Portfolio.hu, have a median expectation of 3.7% yoy for August. We expect 0% mom (on a 0.1% monthly rate of non-fuel inflation and -1% by fuel prices), 3.4% yoy. Anyway, the key point is that headline inflation is uniformly expected to drop, after July's uptick to 4.1% yoy, which was driven in part by fuel prices and in part by rising core inflation. On the latter, no analyst poll is available, and the MNB expects a further small rise or stagnation. We still expect another 25 bps base rate cut on September 24, to 6.5%, before another one of the same size in November, with no further rate action in 2024.