Removal of food price caps expected in Hungary
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Traders diverted the profits from price-capped products to other goods. This has caused the price of non-price-capped items to skyrocket. The removal of the price caps will be very painful for the public, as shops will not decrease their prices even after the price caps are removed.
László Parragh, President of the Hungarian Chamber of Commerce and Industry (MKIK), said in an interview with Index.hu that the time had come to plan for the removal of price caps. According to Index.hu, at the moment, this is a key economic policy task.
“The Hungarian economy has reached a turning point. Positive signs are already visible, even if not all companies are directly aware of this at the moment,”
the President of the Chamber of Commerce and Industry pointed out.
The necessary conditions for the removal of price caps are already beginning to emerge. These conditions include favourable inflation and the forint exchange rate, as well as economic growth and a decline in consumption. According to Pénzcenturm.hu, Parragh said that in the future the forint would strengthen further and inflation would peak in a month or two, so this year will prove to be easier than the previous one.
Worsening shortages
In December 2022, the Hungarian government published that they extended the price caps until 30 April 2023. Nearly all the price-capped products enjoy great popularity among consumers. The increased demand, however, causes shortages and results in empty supermarket shelves.
According to Péter Virovácz, senior analyst at ING, the price cap has become unsustainable. The government should make the decision to remove the price caps swiftly before they trigger even bigger problems.
In our earlier article, we analysed the complex issue and the possible effects of the removal of the price cap. In the harsh business environment, non-price-capped products, to which the deficits from the price cap have now been transferred, would not be cut back once the price cap is removed.
I still don’t understand why the VAT is so high in this sh!thole. Especially on basic stuff like Electricity, Water, food….
Let us do the arithmetic. Inflation is at about 25%, but Hungary and in particular Hungarian products, have increased over 200%. These prices will never come down, but it makes more sense to buy French or Italian products because they are cheaper than local products (like Bravo coffee, Magyar butter and milk etc). What about this difference in local versus “imported”? Unless the food dependent industries stand up to this, they too will suffer.
Exploitation, Greed and Selfishness.
Hungarians we have been FAILED by this Orban Government, in numerous ways, keeping NEEDED food stuff, for Hungarian families to costs that were AFFORDABLE, and NOT to see vastness of food types – caught in the EXPLOSIVE surge on the up-side in cost to us Hungarians – that we continue through the sickness of state position of the Hungarian Economy BATTLE with – affording vastness of food requirements.
Orban has benefited, his Government, the Oligarchs – in just totally SUPPORTING – what continues to be – of us, the millions of “battling” Hungarians – by the process of – Exploitation, Selfishness and Greed.