This could be behind the sharp rise in food prices, and this is what 2023 will bring

By: Trademagazin Date: 2023. 01. 06. 13:02

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In November, inflation was 22.5 percent year-on-year, which is the highest in the EU. This is more than surprise inflation, especially considering that at the beginning of 2022, analysts were expecting inflation of 5-6 percent. It is true that it was before the Russian invasion of Ukraine, but even then it was predicted that the 7.4 percent inflation in December 2021 could stay with us in the longer term.

While previously two-thirds to one-third of the price increase was explained by external and internal causes, according to their opinion a year ago, the domestic effects could be so much stronger in 2022 that the ratio was estimated at around 50-50 percent until the end of 2022. One of the main reasons for this was that the inflationary effect of the roughly HUF 3,000 billion budget expenditure planned to be spent in the first half of the (election) year could appear in the second half of the year, when the international effects would already start to recede, the G7 writes in a recent article.
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