Markets focus on Hungary’s CPI statistics

A rate-setting meeting of the central bank in Poland and the release of significant economy inflation data in Hungary. Both planned for later this week, kept exchange rates in the middle of the region on Monday.

When the Monetary Policy Council meets on Wednesday, investors will be watching with interest. According to a Reuters poll of analysts, the key interest rate will remain at 6.75%. The Polish zloty depreciated by 0.15% to 4.6920, trading within its previous range.

The argument for maintaining steady rates was strengthened by statistics. Showing a decline in inflation in November. As well as third-quarter GDP figures that indicated a slowdown in private consumption. As a result, the National Bank of Poland held fire at its past two sessions.

In light trading, the Hungarian forint was up 0.18% and trading at 409.50 to the euro as investors awaited the release of the CPI data on Thursday. Inflation is the first factor this week that could significantly affect the forint’s exchange rate, according to a forex dealer in Budapest.

“If it exceeds forecasts, the forint could weaken.”According to a Reuters poll, headline inflation will increase from 21.1% in October to an annual rate of 22.2% in November. The central bank stated last month that the spike in food costs, which now account for the majority of annual inflation, may be followed by more “unpleasant surprises” in the upcoming months.

Bulgaria’s economy: reports of a monthly decrease

Data released on Monday indicated that October calendar-adjusted retail sales increased 0.6% annually, down from a 3% growth in September as Hungary’s consumers felt the effects of high inflation. Real earnings decreased by almost 10% for a second quarter in the Czech Republic as inflation reduced take-home pay. Ales Michl, the governor of the Czech central bank, stated on Monday that a decline in commodity prices might indicate a halt in global growth, which would assist to reduce inflation.

The Czech crown increased 0.04% to 24.380 against the US dollar. Warsaw’s stock price increased by 1.42%, while Budapest’s stock price decreased by 1.64%.  Bulgaria experienced the largest year-over-year increase in industrial producer prices among EU member states in Southeast Europe (SEE) in October. Rising by 55.5%, much higher than the EU average of 31.2%.

However, when compared on a monthly basis, Bulgaria was the only EU member state in SEE where the PPI index dropped in October by 8.8%, according to a monthly economy based report released by Eurostat on Friday.

This was also the second-highest rate of reduction across the 27-member union, with Ireland experiencing the biggest decline—32.5%—as opposed to a 2.5% average decline across the EU.

In contrast, Greece, Hungary, and Belgium saw the biggest monthly PPI increases in the EU, with 9.6%, 6.2%, and 2.8%, respectively.

Bulgaria ranked fourth in the EU overall in terms of industrial producer pricing index (PPI) growth year over year, after only Hungary (68%), Slovakia (59.3%), and Latvia (57.9%).

The only other SEE nation in the EU with a PPI growth rate exceeding 50% was Romania. For its part, Croatia saw the least annual increase in production prices.

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