November 25, 2022
Europe’s third-highest rate of inflation.
Hungary had the third-highest inflation in Europe across the board for all products. However, Hungary saw the biggest increases in food prices. Only Estonian and Lithuanian inflation, which rose by 21.9 percent, outpaced the price increase in Hungary, according to 24.hu. The countries with the smallest price increases were France (7.1%) and Spain (7.3 percent). Portfolio predicts that in November, inflation in Hungary may easily be the highest in all of Europe. The sharp rise in food prices is one of the main causes of Hungary’s extraordinarily high inflation rate. The price increase for processed food (44.6%) and unprocessed food (38%) was by far the biggest in Hungary in October.
Each nation’s national economic policies that use subsidies and regulations to divert pricing from the market have a significant impact on the inflation index. Additionally, efforts to control prices in the food, fuel, and energy sectors have a substantial impact on inflation. Because of this, the consumer price index cannot account for a nation’s high inflation rate. A filtered indicator that closely resembles the idea of core inflation was released by Eurostat. They don’t take energy or whole foods into account, according to this method. They merely focus on the price increase. The situation won’t improve, though, if we take the rise in the price of unprocessed food in Hungary out of the price index.
We need to go further to comprehend why Hungary’s inflation situation is so bad. Portfolio claims that domestic factors might also have a negative impact on inflation. For instance, import costs are increased by the weak forint. In addition, the distribution of votes contributed to an increase in prices on the demand side. Therefore, strengthening the exchange rate might be a solution. The central bank is optimistic that the rate of price growth will peak in the upcoming months before beginning to decline.
Source: Daily News Hungary
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