The Hungarian government takes no prisoners in its fight to lower prices and has chosen tools that have not been used anywhere else in Europe. Price freezes and mandatory promotions provided only temporary relief, and as a result, the country faced the highest inflation in the European Union.
On July 31, the regulated food price program ends in Hungary. On February 1, 2022, a decree came into force there that froze the prices of six food products (wheat flour, sugar, sunflower oil, cow’s milk 2.8 percent, pork leg and chicken breast) at the October 2021 level. In the fall of 2022, the catalog of products with guaranteed prices was expanded to include potatoes and chicken eggs.
Hungary. A year and a half with frozen prices
This movement stopped the prices of the above products, but at the same time, the prices of all others rose. Border residents can shop cheaper in traditionally more expensive Austria and Slovenia, and even in Croatia, where prices have risen since the introduction of the euro.
It was unprofitable for manufacturers and retail chains to sell products at prices that did not compensate for production costs. This led to the fact that they simply ran out of stores. To prevent “empty shelves”, chains introduced limits on buying from top to bottom.
Mandatory promotions in Hungary stores
The price freeze obligation ends at the end of July. However, the government does not give up weapons in the fight for low prices. From June 1 to September 30, 2023, stores will be required to carry out promotions: for one week (Thursday-Wednesday), stores will be required to reduce the prices of goods from 20 groups, including, for example, soft drinks, dairy products or fruits on 10%. - informs the Trade News Service.
The controllers will check if the entrepreneurs followed the instructions. If errors are found, they can issue a warning or a fine of 0.5 to 3 million forints (the equivalent of PLN 6,000 to PLN 36,000 respectively). In the case of the most serious violations, officials may suspend activities for a period of one day to six months.
Hungary. The highest inflation in Europe
In May, annual inflation in Hungary amounted to 21.5 percent. A month earlier it was 24.5 percent, so the drop is significant, but it’s still the worst result in Europe. It is worth noting that after many months of continuous growth, consumer prices fell for the first time. Although it was less than half a percent, it is still a good signal for the Hungarians who are tired of high prices. Over the year, food prices there have risen by almost fifty percent.
Source: Wprost
I am George Brown, author at Daily News Hack. I mostly cover economy news and I have been doing this for quite some time now. I have a lot of experience in this field and I’m always looking for new opportunities to learn more.
