Food price inflation is still high around the world and is expected to remain so for a while. This, among other things, is the conclusion of the World Bank’s latest international overview, which shows that Hungary performs exceptionally poorly in the ranking of countries’ real food inflation. Only one Middle Eastern and two African countries have higher real food inflation, putting Hungary in a not so favourable fourth place.
The World Bank published a study in mid-January comparing nominal food inflation with real food inflation. In terms of nominal inflation, the highest food price increases hit South African Zimbabwe’s households, with food prices rising by 376 percent annually, reported Szabad Európa. Lebanon is ranked second with 171 percent, Venezuela third with 158 percent and Argentina fourth with 94 percent nominal food inflation. The World Bank used the most recent of September and December 2022 data for each country.
A list that Hungarians cannot be pleased with
Hungary does not appear among the top ten in the list presented above. However, in the list of real food inflation, only three countries are ahead of Hungary, giving the country the “prestigious” fourth place. This ranking is based on the World Bank’s subtraction of overall inflation from the food inflation. Hungary is followed by one Middle Eastern and two African countries: Lebanon (29 percent), Zimbabwe (121 percent) and Rwanda (28 percent). Hungary came fourth with a real food inflation rate of 21 percent.
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Countries, where real food inflation is high, are those where food price increases are well above average inflation, reports Szabad Európa. As the study suggests, low-income households are much more affected by overall inflation where food inflation is well above average. In this respect, Hungary performs particularly badly. According to Szabad Európa, therefore, inflation in Hungary hits the lower social classes harder than in other countries.
The site also points out that for those with the lowest incomes, the largest part of the budget is clearly spent on food, besides housing costs. After all, the lower someone’s income is, the more money they spend on their daily needs. László Molnár, CEO of GKI Economic Research Co., told Szabad Európa that in Hungary, the lowest income earners (approximately 400,000 households) spend more than a third of their income on food.
Income gaps are still wide
Although there has been economic growth over the past 10 years, this is not reflected in the income gap in Hungary. Even at the economic peak, more than 2 million citizens earned less than HUF 101,000 (EUR 259.35) a month in Hungary, highlights Szabad Európa.
In response to the news portal’s question, László Molnár explains that it is no coincidence that people are so aware of the fact that their lives, and especially food, have become extremely expensive. The reason for this is that they feel the price increase more strongly in the case of products that they buy on a daily basis than in the case of durable goods. It is also a fact that food prices rose almost twice as fast as average inflation last year.
According to the expert, the rapid rise in food prices in the country was influenced by several factors. One such factor was last year’s drought, which forced some products to be imported from other countries. Another major factor was the increase in retail tax, which was passed on to consumers by the shops.
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