Food Inflation Rate Exceeds 30% in Hungary

Annual inflation, the average increase in the price of goods and services, was 15.6% in August in Hungary compared to the same month last year, with food prices increased the most (30.9%), according to according to official data

The monthly inflation rate in August was 1.8%, the Central Statistical Office reports.

The 15.6% annual inflation is a record for more than two decades, and the 1.8% monthly increase is about the same as the 2% acceleration in the previous month. Also worrying is that so-called core inflation, adjusted for seasonal prices, was 19% in August, among the highest in the EU, the popular news site telex.hu notes.

Among the various product categories, food prices increased the most (30.9%), including margarine (66.9%); bread (64.3%); cheese (61%); dry pasta (57.9%); dairy products (54.7%); butter and butter cream (54.5%).

Consumer durables rose by 14.8%, spirits and tobacco by 13.1% and services by 7.7%. There is also a harmonized index of consumer prices, which takes into account the costs for foreigners in Hungary, i.e. the market price of petrol and the world price of overheads. It was 18% in August this year, which predicts that in the near future, headline inflation will also approach this.

Inflation is not an exclusively Hungarian phenomenon; the countries concerned react to inflation in different ways. As telex.hu points out, the Hungarian government was not very far-sighted when it pushed up inflation further in February with the pre-election cash distribution, but managed to slow inflation for a while by limiting the prices of basic foodstuffs, fuel and overheads. The latter became unsustainable by mid-summer, when the cuts in rationing and the gasoline price freeze were partially lifted.