Let’s eat less, eat worse! – is this really the only thing left?

According to Dávid Németh, the senior analyst of K&H Bank, three elements are immediately worth mentioning in the case of sales tax revenue that is higher than anticipated.

the budget “plan” was drawn up in the middle of 2021, in an even substantially lower inflation environment;
high inflation in 2022 took a toll on sales tax revenues;
moreover, in 2022, although the KSH has not yet published exact full annual data, the volume of consumption could also increase by 6-7 percent.

The data is for the first three quarters, where household consumption grew by 7.9 percent. (We will show later that there is already annual data on retail sales, but it only shows the consumption of goods, and the population also pays for energy and services, so it is a broader category.)

Those who earn money can basically do two things with their income: live on it or save it.

“Those who are richer can save proportionally more (they also receive higher interest for this in times of higher inflation), but those who are poorer consume most of their income”

– explains Lajos Török, senior analyst at Equilor. In other words, the bigger someone’s assets and income are, the less they are cut down by inflation. For example, if someone has an apartment that can be rented out, they can raise the rent, and if they have money, they can receive inflation-tracking interest from the state. But it was a particular problem for the poor that a 44.5 percent annual price increase was experienced in the case of foods that are prominent in their consumption.