Rising food prices in Hungary spark concern, many shop abroad for groceries

Hungarians are facing a sharp increase in food prices due to government price freezes. As costs double compared to six years ago, some are shopping in Slovakia for cheaper goods, though not all items offer significant savings.

Index reports, that according to the Hungarian Central Statistical Office, a noticeable increase in the price of basic food items occurred between June and July. Flour prices rose by 38.1%, sugar by 13.9%, and cooking oil by 9%. These increases were the result of price freezes and compulsory measures introduced by the Hungarian government. The Hungarian Competition Authority also investigated the price hikes, as reported by RTL Híradó, overall, experts say that food prices increased by approximately 2.7%.

Compared to 2017, prices in Hungary have risen more sharply than elsewhere in the European Union, according to Péter Szász, an analyst at Portfolio. He explained, “now that the government has fully removed these restrictive measures this summer, the prices of products previously under price freezes have typically surged.”

By 2023, food prices in Hungary had doubled compared to six years earlier, and the increases were already accelerating before the Russia-Ukraine war. Meanwhile, the average rise in the European Union was around 40%. Szász pointed out that the energy crisis, war, supply chain issues, and weather conditions have impacted the entire European market. However, Hungary has experienced especially high food inflation, with prices exceeding a base increase of 40%.

Two years ago, György Matolcsy, the governor of Hungary’s central bank, stated that price freezes contribute to inflation. He argued that they make substitute products more expensive, such as fat being used instead of oil. Matolcsy said, “price caps cause a loss of 3-4%, meaning an inflation surplus, so all price caps should be removed immediately.”

Is it worth shopping abroad due to rising food prices?

A few months ago, the Slovakian Kaufland began attracting Hungarian shoppers with a special offer magazine in Hungarian, featuring prices in forints, as we previously reported. Telex compared prices between Tesco in Győr and Kaufland in Nagymegyer.

They write, for example, that white flour costs more than double in Hungary compared to Slovakia, and a 350-gram jar of jam with 75% fruit content is one-third of the price in Slovakia. Due to high excise duties, spirits are traditionally cheaper in neighbouring countries, with a litre of Jägermeister costing nearly half of its price in Hungary. Other notable price differences include laundry detergent, where the price gap ranges from 35% to 21%, translating to savings of HUF 1000-2500 (EUR 2.5-6.3). Even a short trip across the border could save significant money, with a bottle of olive oil alone saving HUF 1500 (EUR 3.8).

However, Telex also noted certain items are not worth buying abroad despite the rising food prices in Hungary, such as flour, potatoes, sugar, dairy products, pork legs, and chocolate.

In summary, the portal suggests that while bulk weekend shopping in Slovakia might not lead to significant overall savings, certain products offer enough of a price difference to make it worthwhile, especially if purchased in large quantities.

Read also:

• Temporary relief: inflation in Hungary eased in August – Read here
• Hungarians go shopping abroad because Hungary became too expensive – Read here

Featured image: depositphotos.com

Source: