CEE ECONOMY-Hungary industrial price index climbs to 19-month high on weak forint, energy costs

By Gergely Szakacs

Jan 7 (Reuters) - Higher energy costs and a decline in the forint amid the threat of U.S. tariffs on Europe after Donald Trump's election as U.S. president lifted Hungary's industrial producer price index to its highest in 19 months in November, data showed on Tuesday.

Hungary's industrial PPI surged to an annual 7.9% in November from 2.6% in October, its fastest increase since May 2023. In monthly terms, prices rose by 4.3%, a pace not seen since July 2022, the Central Statistics Office said.

"The price rise was primarily caused by the weakening of the forint exchange rate against the euro and the world market price of energy being higher than earlier on," it said in a statement.

The forint EURHUF= sank to 22-month-lows after Trump's stunning win in November amid concerns his planned tariffs on China and Europe could hit central Europe's export-reliant economies through deep ties to the German car sector.

On Monday, the forint sank to fresh two-year-lows at 416 versus the euro after Trump rebuffed a Washington Post report that said his aides were considering a watered-down regime of tariffs aimed only at imports of critical goods.

Declines in the forint, which fell 6.5% to the euro last year, forced the National Bank of Hungary to abandon its rate cut cycle even though its 6.5% benchmark interest rate is still the European Union's joint highest, alongside that of Romania.

Poland's zloty EURPLN= meanwhile scaled its strongest level in nearly five years versus the euro on Monday.

Hungary's central bank, which raised its 2025 inflation forecast by 50 bps to a range of 3.3% to 4.1% last month, has warned that Trump's possible tariffs could harm Hungary's growth and boost inflation.

The NBH said any extension of protectionist measures posed a "substantial risk" to global growth and could exacerbate the vulnerability of small economies like Hungary, whose export share relative to output is among the highest in the EU.

(Reporting by Gergely Szakacs
Editing by Bernadette Baum)

((gergely.szakacs@thomsonreuters.com ; https://x.com/szakacsg ; +36 1 882 3606 ; https://www.reuters.com/authors/gergely-szakacs/))