Economist László Miklós: it is unlikely that the government will put an end to price cap

By: Trademagazin Date: 2023. 01. 19. 12:36

László Parragh, the president of MKIK, previously said in Egyenes Beszéd: he is negotiating with the government about the possibility of introducing a price cap. According to economist László Miklós, this is unlikely, while Levente Tóth, analyst, expects the government to prepare some kind of change, but it is not known what.

László Miklós said in the ATV Start program: the government also knew that the price cap had no effect on the price increase, they knew that the traders would collect the lost amount elsewhere. This measure was only good for getting votes, with which they targeted the poorer class. With the gasoline price freeze, they could not transfer this drop to another product, the price freeze there really moderated inflation.

The official price of fuel, on the other hand, caused a budget loss, because the extra profit arising from the difference between the quotation of Russian and Brent oil was indirectly taken from MOL by the state, by returning half of it through the official price, and taking the other half with the extra profit tax.

According to Levente Tóth, when the food price cap was introduced, it had a short-term inflation-reducing effect. When a price cap can make sense is when there is a sudden fluctuation in prices, the problem is that when it was introduced, it was introduced as a temporary measure, but since then it has been continuously extended, so the positive effect no longer applies, as the market adjusts for this.

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