Gergely Gulyás: anything can happen regarding the margin stop

The Minister recalled that the government last decided at the end of August to extend the margin freeze until November 30. He said that the measure makes a significant contribution to reducing inflation, but at the same time, significant differences can be observed between individual products: where demand is greater than supply and the harvest was weaker, there is a higher price increase.

According to the latest data from the Central Statistical Office, inflation in August was 4.3 percent, the same as in July. Although this is not considered exceptionally high, it is still well above the central bank’s 3 percent target level. According to Gábor Regős, chief economist at Gránit Fund Management, the current figure would be approximately 1.5 percentage points higher if the government had not introduced the margin cap and had not concluded agreements with certain sectors to postpone price increases.

The margin cap was announced by Prime Minister Viktor Orbán in March: the government capped retailers’ margins at 10 percent for thirty basic foodstuffs in order to prevent overpricing. Later, the regulation was extended to household goods, so that today the restriction applies to a total of 30 product categories, affecting several thousand goods.

In a statement issued at the end of August, the Hungarian Competition Authority emphasized that the margin cap had fulfilled its expectations, helped consumers, and they do not see its elimination as justified. According to the GVH’s investigations and the online Price Monitor, the measure has curbed the rise in food prices.

At the same time, Gergely Gulyás made it clear that the government still considers curbing inflation to be its primary goal, and the margin freeze plays a key role in this. However, he added that all options are open, meaning that the cabinet can either tighten or relax the rules in the coming months, depending on market and economic developments.