What causes food price increases and how long will they last? György Raskó speaks

The surge in food prices began with supply disruptions caused by the pandemic, followed by an energy crisis related to the Russian-Ukrainian conflict and eventually leading to a war. Alongside soaring energy prices, agricultural input costs also skyrocketed. Speculation due to the war drove agricultural commodity prices to unprecedented levels, contributing to a rapid increase in food prices. In response to the soaring prices, the Hungarian government implemented measures such as freezing the consumer prices of essential food items and reintroducing a retail tax. However, these measures had unintended consequences, with retailers shifting the losses onto other products, leading to unnecessary price increases. The government also implemented various measures to improve public sentiment during the election campaign, which resulted in increased retail turnover despite the price caps. As time passed, retailers faced growing losses and began raising prices extensively, including non-essential items. Additionally, the weakened Hungarian forint further increased the cost of imported goods. While food inflation was present in other EU countries, Hungary experienced a record-high increase of 48% in food prices compared to the average 15% in other countries.