Hungarian government struggles to curb rising food prices

In a recent announcement, Viktor Orbán said that new price stops would be introduced. Although we do not know what items will be included in this, we can make educated guesses. No matter what the government does, it seems to tackle the cost of living crisis. However, it is doubtful that food prices will reach normal levels any time soon.

From the report of Magyarhirlap.hu a government-friendly newspaper, we might be able to guess which items’ prices will be re-evaluated. From the analyses of the statistics, we can see that there are a few basic items that had seen huge price increases. Bread, cheese, butter, sour cream, buns, meat, rice, pasta and eggs have been subject to the greatest price hikes in the past year. Albeit, not a basic necessity, coffee became a lot more pricey as well. Even if it is not a necessity, for many Hungarians it is a very important thing to have in their kitchen cabinets. The items receiving a new, fixed price will be very likely selected from this list above.

Unstoppable inflation

According to VG.hu the end of the price increases is not yet here. Except for the food items that are included in the price stops, every single food article had seen an incredible rise in prices. The introduction of new fixed prices will certainly drive up the cost of other items. This is because retailers try to make up for the loss by raising the prices of items that are not part of the government’s policy.

The price hikes are a combination of multiple factors. Inflation started last year, but it was further exacerbated by the war in Ukraine. Besides, the devaluation of the forint compared to the euro caused imported articles to be more expensive.

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But why food items are getting more expensive? It can be down to their shorter shelf lives, hence retailers cannot stock up on them. This way the new price tags appear much faster compared to other longer-lasting items. We should also not forget the fact that agricultural production became a lot more expensive due to the war. Farmers have been dealing with a shortage of fertilisers, for example.

Despite some positive indicators, price increases are still expected. This year’s harvest was exceptionally poor and the effects of this will appear in the near future. Although, at the very least, the stock market price of natural gas and cereal reached pre-war levels. Nevertheless, prices are first expected to plateau before potentially dropping again. However, we should not calculate with significant decreases. The current goal is to prevent further price increases.

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Source: vg.hu, magyarhirlap.hu