Inflation in Hungary reached 22.5% year-on-year in November, marking a new twenty-year high, with food and energy remaining the items with the biggest surges, while analysts warn that the recent removal of the fuel price cap could accelerate inflation in the coming months.
Consumer prices rose at a record rate of 1.8% since October, EURACTIV’s media partner Telex reported.
Food prices, growing fastest, have increased 43.8%, but some items have more than doubled, with the cost of purchasing eggs having grown by 102.9%.
According to Péter Kiss, investment director at Amundi Fund Management, the abolition of the petrol cap on Tuesday will increase inflation by a further 2.5% in December and January combined.
The rise in prices is threatening the livelihoods of many, with charities reporting that workers have recently joined homeless people on fixed incomes and pensioners at their food distributions.
Hungarian inflation is now the fourth highest in Europe, surpassed only by the Baltic states but is likely to take the top spot in the EU next year, Hungarian National Bank governor György Matolcsy has recently warned.
At a parliamentary hearing on Monday, György Matolcsy, head of the MNB, strongly criticised the government’s economic policy.
“We have to face the fact that our financial, macroeconomic indicators are among the worst or second worst in the European Union,” Matolcsy said.
“We have to face the fact that if Hungary does not change its economic policy, if it does not implement a two-thirds turnaround in economic policy, it will lose this decade, and stagnation and stagflation will follow. This can still be reversed, but it will be too late next year”, the central bank chief added.
Matolcsy has been known to gently criticise the government before. It is not yet clear whether the decisions he expects will be made, but it is now highly likely the annual inflation rate will remain in the double digits in 2023.
Source: euractiv.com
