As we also reported, the government has extended the margin cap aimed at reducing the prices of food and drugstore products – according to the latest Hungarian Gazette. Originally, the measure would have expired on August 31, but under the new decision it will remain in effect until the end of November.
Prime Minister Viktor Orbán announced a few days ago in the Facebook group Harcosok Klubja: “margin cap extended,” because – in his words – “we will not let the multinationals mess with people.” At a government press briefing, Gergely Gulyás, Minister of the Prime Minister’s Office, added that the purpose of the regulation is to prevent unjustified price increases. He noted that without the measure, the ten most important food products would be on average 35 percent more expensive.
Gulyás Gergely: november 30-ig meghosszabbítják az árrésstopot
According to economists, the margin caps have so far moderated price increases, but their removal would likely put additional inflationary pressure on the market. Gábor Regős, Chief Economist at Gránit Fund Management, told Világgazdaság that the regulation will certainly remain in place this year, as its elimination would increase the rate of inflation by around 1.5 percent. Péter Virovácz, Chief Economist at ING Bank, reminded that the impact of government measures has been offset by supply shocks, such as livestock epidemics.
The latest inflation data also show that the pace of price growth is higher than expected, so the market does not anticipate a cut in the base interest rate in the near future.
