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Hungary. For the first time in a year, inflation fell below 20 percent

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Inflation in Hungary fell below 20 percent for the first time since August 2022, according to July data published on Tuesday by the Hungarian Central Statistical Office (KSH). This is still the highest level in the entire European Union. Viktor Orban’s government says inflation will fall to single-digit levels by the end of the year.

Food prices increased year-on-year by 23.1 percent. The most expensive were eggs (30.7%), dairy products (29.5%), coffee (28.8%) and bread (26.7%). On the other hand energy prices increased by 35.7 percent. On the other hand, there is a slight decrease in food prices on a monthly basis: eggs are cheaper by 5%, milk by 4.4%, and bread by 3.9%.

Consumers cut spending

“People are cutting back on spending so much that shops can’t really raise prices anymore, price competition has started, agriculture is having an exceptionally good year due to the weather, and the rise in prices of imported goods is held back by the still stronger HUF,” writes the economic portal HVG. This is the first fall inflation below 20 percent from August 2022. As emphasized by HVG, the last country of the European Union (not counting Hungarian) fell below 20 percent. inflation rate in March. Hungary still has the highest inflation in the entire EU. Taking into account the countries with available results for July, it is in second place Slovakia with an inflation rate of 10.2 percent. The government of Viktor Orban says that by the end of the year inflation in Hungary will fall to single-digit levels. According to analysts quoted by the economic portal Vilaggazdasag, this may even happen as early as October or November. However, the HVG portal emphasizes that Hungary will most likely be the last EU country where this will happen anyway.

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Abolition of price limits for basic food products

Although very high inflation affects the ratings of a political party in Hungary, these are not significant changes, the media write. According to the last poll, the results of which were published by the Telex portal, public support for the ruling Fidesz is at its lowest level for half a year. The reasons for the decline include difficulties in overcoming inflation and the abolition of price caps on basic food products by the government. However, even despite this, Orban’s party can count on 31 percent of the vote. support, and the difficult economic situation does not result in a significant increase in the opposition’s ratings. The strongest opposition party, the Democratic Coalition, can count on only 13 percent of the vote. support. The survey was conducted on a representative group of 1,000 people using telephone interviews on July 14-25.

Read also: No more store limits, time for mandatory promotions. Prices soared

Main photo source: Shutterstock

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