Eastern European Inflation Rates – Update.

posted in: BTA blog, ertsei | 0

InflationCEE-June15[ Source: Concorde Asset Management]


In 2014, Romania’s inflation rate floated in a 0.9%-1.8% range through the year. While dipping as low as 0.4% in Feb’15, the Romanian inflation rate estimate came back to 1.3% in May’2015, with a Romanian Central Bank target of 2.5%. A base rate adjustment of -25bps was announced by the RCB on May 6, 2015, raising base interest rate to 1.75%.

Despite being in deflationary territory since July’2014, the Polish National Bank raised its rate by +50bps to 1.5% on March 4, 2015, which did reduce deflation from -1.3% in March to -0.6% May’2015, the PNB retaining an inflation target of 2.5% (+/- 1%).

After 8 months of negative inflation, Hungary jumped from -0.3% to +0.5% in May’2015 and +0.6% in June’2015. This was accompanied by an -15bps adjustment of base interest rates by the Hungarian National Bank in June’2015 to the 1.5% level, while the HNB inflation target remains 3.0%.

In the Czech Republic, the central bank has refrained from intervening this year and modifiying is current base rate of 0.05%,. As a result, after a brief 2 month dip in Jan/Feb’2015 with -0.01% inflation, May inflation rates reverted to the level of last Summer around 0.7% with a target of 2%.

Finally, while starting with an 0.9% inflation rate estimate in 2014, the EU dropped a full 1% by Dec’2014 to -0.1% and staying in deflationary territory through April, before recovering in May’2015 at +0.3%.

Compiled by Ertsei –