Hungarian food prices third-highest in the EU?!

Hungary has the third-highest price increase for unprocessed goods in the European Union. According to Minister Márton Nagy, the extreme price surge can be attributed to the fact that “food items used to be cheaper a year ago”. Do foodstuffs really cost less abroad than in Hungary? Follow our article for more information.

Even the cost of putting together a plate of lecsó could rise above average as the producer prices of peppers and tomatoes are projected to increase by 30-40 percent, said the president of the South-Alföld Gardeners’ Cooperative. Recently, a Hungarian customer living in Austria complained about the prices at the farmers’ market in Szeged. “Everything is way much cheaper abroad. For example, a kilo of watermelons cost only 80 cents.”

Despite the price freeze, food prices in Hungary continue to rise at an above-average rate, reports RTL. According to a recent Eurostat report, domestic price increase for unprocessed goods is the third highest in the European Union. Economist Márton Nagy commented that shopping at Hungarian supermarkets was considerably cheaper a year ago compared to many EU countries. The GKI Economy Research presumes that the record low forint and the minimum wage increase are the reasons behind the skyrocketing food prices in Hungary.

Hungary in food price crisis?

In Hungary, last month, unprocessed raw foods such as fruits and vegetables already cost 19.5 percent more than a year earlier, writes the recent Eurostat data. Portfolio.hu analyst István Madár said that unprocessed food was among the first items to see a steep price surge.

In this product category, Hungary has recorded the third-highest price increase last year, after Bulgaria and Estonia.

• Read Also: Russian gas supplies will be cut off for a week in Hungary

An economist’s point of view

Márton Nagy explained the unprecedented price increase by referring to the limited domestic transport opportunities. “Hungary doesn’t have a port which is an important factor when it comes to setting food prices.”

“It [food inflation] is not the direct result of the price cap, without the price cap food inflation would be actually even higher,” he said. He added that despite the price cap, the cost of food has been rising faster in Hungary than in most EU member states. “Inflation is also coming down since you can’t have the same increase every year due to the base effect. We should treat the comparison of such indices with caution,” he said.

• Read Also: Breaking news: Hungarian parliament rejects EU directive on global minimum tax

Source: rtl.hu, gki.hu