Is inflation in Hungary caused by the war?

The Hungarian government explains high inflation by the Russian-Ukrainian war. But much of the monetary deterioration occurred before the war. For a long time, the government did nothing to curb the inflation. In fact, experts say it made matters worse until the elections.

Wartime inflation

Viktor Orbán gave an interview on Hungarian state radio on 10 June. This was the first time the Hungarian Prime Minister used the term “war inflation”. Orbán used it to explain the rise in prices in shops.

“This is a war inflation. So it’s a different kind of problem than when inflation hits an economy in peacetime. It is related to war,” Orbán said. “Partly the fact of the war itself drives up energy prices, partly the way we, the West, react to the war with sanctions, it triggers further price increases,” the Hungarian prime minister continued, who returned to the phrase eight times during the interview, rtl.hu reports.

Read alsoOrbán: ‘We can prolong good years in Hungary’s agricultural sector by working together’

A recurring theme at Fidesz

In the 1 month since the interview, Orbán’s social media posts have often contained the phrase “war inflation”, mfor.hu writes. Subsequently, Fidesz politicians have also started to use it.

Gergely Gulyás, Minister of the Prime Minister’s Office, used the phrase at the government briefing on 17 June. The next day, Szilárd Németh blamed the left for the inflation war. While Péter Szijjártó, Minister of Foreign Affairs and Trade, referred to Hungarian-Bavarian cooperation.

Record high inflation

According to the Hungarian Central Statistical Office, inflation in Hungary is at its highest level in 15-20 years. According to analyst József Hornyák, “a significant part of the rise in inflation occurred before the war.” According to Hornyák, the rise in prices started after the Covid pandemic. After the lifting of restrictions, many people wanted to spend money, and this led to a rise in prices. According to Hornyák, “the government did not take steps to curb inflation.”

Analyst Nándor László Nagy believes that there is no war inflation. The war has certainly worsened the situation, but the process started earlier.

Hornyák thinks that the pre-election handout has only made matters worse. The petrol price freeze will moderate inflation, but it is a burden on businesses.

Read alsoBudapest Airport: 10-15 flights to be cancelled a week due to chaos in Western Europe

Source: rtl.hu, mfor.hu