End of the century: drought drove up food prices in July

Rising prices of fruit, coffee and chocolate

Food prices rose by 5.9 percent year-on-year. The largest increases were seen in chocolate and cocoa (20.4%), coffee (19.6%), seasonal food products (18.1%), and eggs (17.7%). The price of fresh domestic and tropical fruits jumped by 8.4 percent in a single month, which Századvég attributes to drought conditions.

A positive exception was the price decrease of margarine (-30.1%), flour (-10.4%), and sugar (-9%), partly due to margin regulation.

Rising energy and service costs

Among the main groups, household energy prices increased the most on an annual basis (10.9%), with piped gas up by 23.1 percent. According to Századvég, this is explained by increased consumption alongside regulated pricing.

Service inflation eased to 5.3 percent but remained above the central bank’s target range. Significant increases were recorded in personal care services (10.1%), sports and museum tickets, as well as home repair and maintenance (all 10%). The price of holiday services rose by 8.9 percent month-on-month.

Mixed inflation picture

According to Századvég, the slowdown in annual inflation is a positive development, but it is largely the result of a base effect, as July last year saw a sharp rise in food, services, and fuel prices. On a monthly basis, however, the 0.4 percent price increase is considered high, mainly due to adverse weather conditions affecting agriculture.