Prices may grow with a higher extend than the rate of the VAT increase

The Friday announced VAT increase would justify a 1.6 percent price increase, but previous experience has shown, that the majority of firms raises the prices higher than the rate of VAT increase. The weak forint and the expected price increase of raw materials pressure consumer prices upward as well.

According to the government's proposal; the standard VAT rate will be increased by 2 percent, from 25 to 27 percent from the 1st of January 2012. Previous experiences have shown that the prices in the shops will increase higher, than the rate of VAT increase – reports [origo].