Let’s go back to 1996, the last time when inflation was above 22 percent in Hungary. Seemingly, the rise of inflation has no end in the country, but the trend is slowing according to recent statistics. Despite the good news, there is still a possibility that the situation will possibly still worsen. Even if the trends are decelerating, there is no sign that they will reverse.
Food prices will still experience a sharp increase — told Péter Virovácz, the lead analyst at ING Bank to vg.hu. Over 60 percent rise in agriculture producer prices is predicted by indices. Other experts confirm these predictions and they tell that Hungarian inflation would be still exceptionally high. The mitigation of inflation comes from the relative stabilisation of the forint. Inflation will continue, but it will not be as high as in the previous two months.
The slowing inflation comes from the fact that in November there were no drastic falls in economic indices. This caused relative mitigation in the worsening trends. However, this does not mean that the prices will fall, it just means that they will increase slightly slower. But, there is an unforeseen condition that adds about 2 percent to the already high inflation according to experts. The fuel price caps were suddenly phased out after shortages became widespread.
The sudden increase in fuel prices will cause another jump in prices, due to the rising cost of transportation. Inflation levels may peak at about 25.1 percent at the beginning of 2023, while by the end of the year it shall fall to about 8.9 percent. Therefore, the predicted annual inflation for 2023 is about 18.5, which is lower than the 2022 level, but it is still not ideal.
50 percent increase in prices
According to privatbankar.hu food prices have already crossed the 40 percent threshold in November. The Governor of the Hungarian National Bank, György Matolcsy predicted a 50 percent increase in food prices in the near future. Recent data shows that fortunately the 50 percent limit has not yet been reached, but, average shopping costs 44 percent more than last year. Just compared to last month, the average price increase was about 2.8 percent.
Thankfully, price caps are in force for the most basic products. The only problem is that often these products are not available and many shops had to introduce purchase restrictions for customers. The new slogan of the crisis, therefore, became:
“There is none, but at least it is cheap.”
The shortages are understandable as the price of milk, for example, rose by 121.2 percent since last year. This makes production unprofitable which causes shortages. At least sugar is cheap thanks to the price caps which are essential for the holiday season. Well, if you can find any.
Read also Central bank governor: Hungary is in a “near-crisis situation”
Source: privatbankar.hu, vg.hu
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