Industrial producer price inflation decelerates in September, for the first time in the last 12 months

HUNGARY - In Brief 06 Nov 2022 by Istvan Racz

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Industrial producer prices rose by 1.8% mom, 42.7% yoy in September. The August data was +4.1% mom, +43.4% yoy. One could say that the deceleration was just marginal, as regards the year-on-year data at least. Yet, this was the first time over the last 12 months that a lower yoy number appeared than in the previous month. And the slowdown was much more pronounced on month-on-month basis. The September slowdown came, beyond doubt, from the energy sector, whereas producer price inflation continued to accelerate somewhat further in manufacturing. Otherwise, the deceleration was largely equally distributed between domestic sales and exports. The significance of all this is that industrial PPI, and within that the prices of the energy sector, have been a key driver of rising CPI-inflation so far. It seemed natural that sooner or later the post-summer decrease of international energy prices would appear in domestic prices as well. But it came a bit earlier than we would have expected. Analyst surveys on industrial PPI do not exist in Hungary.