Inflation in Hungary in November outpaced that in the formerly leading Baltic countries. It far exceeds inflation in other countries in the region and is more than double the EU average. Moreover, it continues to accelerate as competitors’ rates slow down.
Figures published by Eurostat, the statistical office of the European Union, show that inflation in Hungary was 23.1% in November, according to the Harmonized Index of Consumer Prices (HICP) calculated by Eurostat. This puts Hungary in first place, ahead of the Baltic countries. Latvia recorded 21.7%, Lithuania and Estonia 21.4%.
In addition, inflation in Latvia has stagnated and in the other two Baltic countries has fallen compared to October. While inflation in Hungary is still basically accelerating.
In Hungary, the December data will include the phasing out of the fuel tax, which is expected to add 2-3% to the domestic index. A further inflationary boost is expected in January, when businesses will start pricing into their products the cost of wage increases at the beginning of the year.
Economic Development Minister Márton Nagy told a conference the other day that inflation could peak at 25-27% (according to the Hungarian Central Statistical Office methodology, which typically do not differ significantly from HICP) in January-February.
The European Union average for HICP inflation was 11.1% in November. That also represents a slowdown from the EU average of 11.5% in October.
Hungarian inflation is well above that of the other countries in the region, with the Czech Republic at 17.2%, Poland at 16.1%, Slovakia at 15.1% and Romania at 14.6%.
Observers say that this somewhat contradicts the Hungarian government narrative that Hungary is experiencing war/sanction inflation, because if the inflation was only caused by war/sanctions, the Hungarian figure could not be that much higher than the other countries in the region.
Not surprisingly, Hungarian inflation was driven by overheads and food prices. Gas was 120% more expensive, while overheads in general were 66% higher than a year earlier – due to the government phasing out some of the below-market-rate preferential tariffs, i.e. the introduction of a higher tariff band above what is considered average consumption levels.
Food inflation in Hungary was 49.2% for the whole product group. Within this, there are some particularly striking items. Egg prices, for example, more than doubled in a year. That of cheese and bread rose by 83%, milk by 80% and pasta by 70%.
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