Despite the government’s promise of single-digit inflation by the end of next year, the rise in prices will continue to make life more difficult for Hungarians in 2023, an economic researcher told RTL Híradó.
Prices are already high, EU’s highest inflation
At the end of 2023, we will be comparing prices with the current, already high ones. A further increase of a bit less than ten percent is expected next December, according to the Minister for Economic Development. This could still mean inflation of around 20 percent a year next year.
It became official on Friday, 16 December, after Eurostat released the latest data, that Hungary has the highest inflation rate in the European Union, 23.1 percent in November. It is more than double the EU average and much higher than in other countries in the region, RTL Híradó reports.
The inflation rate doesn’t incluse the fuel price rises
What is more, the record 23.1 percent inflation rate does not even include the significant rise in fuel prices. The Eurostat figures are for November, and the Hungarian government announced the lifting of the fuel price freeze on 6 December. Minister Márton Nagy expects this to push inflation roughly 2.2-2.3 percent between December and January.
According to the minister, inflation could peak around 25-27 percent early next year, and the government still expects it to reach single digits by December 2023. According to economic researcher László Molnár, the base effect mentioned by Márton Nagy means that they will be compared to the current, already drastically high prices. So price rises are not stopping, only slowing down.
More severe poverty to come
He said that this price increase will also bring the average annual price index to nearly 20 percent next year. Meanwhile, this year, the price index is expected to be only around 14 and a half percent. This means that annual inflation could be even higher next year than this year.
At present, 13-14 percent of the population may have daily subsistence problems. Next year, the poor will face even more severe poverty, László Molnár added.
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