"Domestic sales prices rose by 0.4% in May 2007 compared to the previous month, and by 7.8% compared to May 2006. The export sales prices expressed in HUF were higher by 0.4% compared to the previous month and lower by 5.5% compared to the corresponding month of the preceding year. Industrial producer prices involving both of the price changes of domestic and export sales were higher by 0.4% compared to both of the previous month and to May 2006."
This explains the slightly improved trade balance, since the lower HUF value (as expressed in the 5.5% drop in real PPI for export) means that exports are now somewhat cheaper. Nonetheless, a 7.8% annual rate for the domestic PPI increase is far from being positive news or benign.
To get some idea while export real PPIs have dropped it might be useful to look at this twelve month Huf/Euro chart:
And then to put things in perspective to look at the two year one to see that things are now, more or less, back where they started. The interesting question, is, of course, what happens next?
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