Headline inflation in Hungary edged down to 7.9% year-on-year in November, the lowest rate since January last year, as the price growth slowdown continues.

The country’s headline inflation was lower than the 8.1% forecast by analysts in a survey by Reuters news agency. Meanwhile, core inflation eased to 9.1%, in line with predictions.

Hungary’s central bank has led central European peers in easing monetary policy, slashing rates since May. Yet the benchmark rate remains the European Union’s highest at 11.5%.

“The most important thing is that we can see a widespread disinflation process, the two main sources of which are food and fuel prices,” according to Peter Virovacz, an analyst at ING Bank in Budapest

“Incoming data suggest that by the year-end headline CPI could slow to an annual 6% year-on-year, with average inflation for 2023 coming in at 17.7%.”

However, he added that the central bank would unlikely alter the pace of its rate cuts despite the data. The analyst said the National Bank of Hungary is expected to cut the base rate by 75 basis points at its meeting on 19 December.

Hungary’s central bank has received criticism from the government, which has been focused on lower interest rates to boost the economy, Reuters reports.

Although high inflation has battered central Europe since last year, price growth has returned to single digits, with policymakers concentrating on monetary policy easing.

Since May, rates in Hungary have been lowered by 650 basis points.

Inflation in the country reached 25.7% year-on-year in January and declined into single digits in October for the first time since April 2022 at 9.9%, under market forecasts.