According to expectations, inflation will be around 6.9% in March this year. This is lower than the 7.1% consensus and significantly lower than February’s 8.5%.
“According to expectations, the annual inflation rate of food, alcohol and tobacco products is expected to be the highest in March (15.4%, compared to 15.0% in February), followed by non-energy industrial products (6.6%, compared to February 6 .8%), followed by services (5.0%, compared to 4.8% in February) and energy (-0.9%, compared to 13.7% in February).” – he announced the statistical agency.
Some of the higher food prices are due to the lagged effect of energy costs, which spiked last year but have now fallen significantly.
The price of natural gas, for example, peaked at $10 last August. It is now 5 times lower, down to $2.2, but it may take some time for this to be reflected more broadly in food prices or in the prices of industrial products. However, river degradation is largely decreasing everywhere.
Whether the steep decline is reflected in the United States will be revealed following the data is published at the end of next month. But in Germany, for example, inflation fell from 9.3% in February to 7.8%, down from a peak of 11.6% in October to 7.8%.
Inflation in Hungary is at a record high
Unfortunately, Hungary is still very far from these inflation values. Although inflation is already easing, it is still at a record high in global terms. Inflation in February was 25.8%, which represents a decrease of a couple of tenths of a percentage point compared to the price change measured in January. But this is still 5.7 percentage points higher than the second worst value in Lithuania at 20.1%. In the neighboring countries, the price deterioration is lower by more than 8-10% percentage points: Poland 17.2%, Slovakia 15.4%, Croatia 11.7% and Austria 11%. It is interesting that the “war inflation” weighs on us the most, even though our government protects us the best from everything in the world, despite the fact that since 2016 there has been a state of emergency in Hungary for more than 2,550 days.
Will central banks lower interest rates?
This favorable European inflation news may give some breathing room to the European Central Bank (ECB), which may slow or even pause now following raising interest rates from 3% to 3.75%.
Fed Chairman Jerome Powell suggested earlier this month that interest rate hikes were coming to an end, and the ECB, which began raising rates later, might follow suit.
Whether this has any effect on Bitcoin, which is up slightly today, is unclear. However, European and US stocks are in the green as markets look ahead to interest rate cuts now expected in nine months.
However, the extent of interest rate cuts will depend on how quickly inflation declines. But the downward trajectory seems clear so far in both Europe and the United States.
