HU CPI: 21.5% in May, significantly below the consensus

May CPI: faster-than expected deceleration, with negative m/m index
 Y/Y: 21.5% (Bloomberg consensus: 22.3%, previous: 24.0%)
 M/M: -0.4% (Bloomberg consensus: 0.5%, previous: 0.7% )
The m/m CPI index was pushed down into negative territory primarily by the 6.6% drop of car fuel prices and
the 3.0% drop of the household energy price index (still the result of the changing proportion of consumers
below and above the average consumption). The resulting inflation was much better than the consensus even
as expectations implied a nearly 200bps drop of the y/y index versus the preceding month. Hence CPI moved
lower in the fourth consecutive month, at an accelerating pace. The m/m index showed a drop for the first
time since November 2020.
Core inflation also moved lower significantly, to 22.8% (22.7% tax-adjusted) following a new peak in March
and a 24.8% rate in April), with the m/m index also significantly decelerating to 0.5%
Food inflation was close to stagnation for the second time in m/m terms,+0.1% in May versus the 1.9%
average of Q1. Core ex-processed food CPI moved down after peaking in March-April.
Services prices still represent a risk factor, with a m/m rate well above the average at 0.9%, but decelerating
below 1% for the first time after four months. Looking at the past one year, household energy and food prices
continued to rise the most. However, with the exception of services, six of the seven main price categories
showed disinflation in y/y terms. The headline y/y index is down by 4.2pps from the January peak.