It will not depend on food to have the set single-digit inflation by the end of the year

By: Trademagazin Date: 2023. 09. 07. 12:59

In the average Hungarian household budget, food expenses, alongside utility bills, represent a significant portion. Especially during periods of high inflation like the present, keeping track of food prices becomes crucial. According to data provided by G7.hu, which has been conducting a more than three-and-a-half-year-long series of studies, annual inflation has become single-digit. However, this doesn’t necessarily mean relief for Hungarian consumers.

One year ago, our shopping basket, consisting of 42 items purchased in the Aldi, Lidl, Penny, and Tesco supermarket chains, cost an average of 22,896 Hungarian Forints. In August 2023, the same shopping would have cost 23,994 Hungarian Forints. These numbers indicate that according to G7’s own unofficial calculations, the annual inflation has dropped to just 4.79 percent. This is a significant decrease compared to previous years when inflation exceeded 50 percent. However, it’s important to note that the lower percentage is largely due to the base effect: last year’s August prices were already high, and we are now witnessing a slower rate of increase.

If we look back two years to August 2021 (when our shopping basket was valued at 16,574 Hungarian Forints), we see an inflation rate of 44.8 percent.

Monthly tracking of our shopping expenses also reveals that the total cost has been decreasing since February 2023, although only in small steps, and it remains significantly higher than the average pre-inflation level. There is also only slow improvement when considering the shopping’s proportion to an average monthly salary.

The interesting aspect of August 2023 was the end of the price freeze. Out of the nine items we examined, seven saw their prices rise, with sugar and chicken breast particularly noticeable. However, it was significant that the prices of UHT milk and flour did not change significantly. Prices of sunflower oil, eggs, and potatoes actually decreased compared to the price freeze period. It’s important to note that supermarkets are still required to sell these products at a loss, transferring the cost to other items, so these prices do not necessarily reflect normal market conditions.

In summary, while food price inflation has significantly decreased compared to the previous year, it still remains high, and there is only slow improvement in terms of the standard of living. The evolution of inflation continues to be noteworthy, and food prices play a significant role in this. The Central Statistical Office will release official data in September, but based on G7.hu’s data, it is expected that food price inflation will already be in single digits, which is in line with government goals.