The Hungarian government may decide on new price caps on foodstuffs within a matter of days to curtail inflation, which could reach 25% by the end of the year.

 

This is according to Hungary’s Minister for Development Marton Nagy, speaking to Inforadio.

 

Last month, Prime Minister Viktor Orban unveiled the government may extend price caps on some basic foods and fuel within the coming weeks, Reuters news agency reports.

 

Hungary’s government placed caps on foodstuffs such as milk, sugar and sunflower oil, amongst other items, back in February in an attempt to protect households from skyrocketing costs. In addition, fuel prices and mortgage rates have also been capped.

 

The Minister for Development said that in order to rein in inflation, the price caps need to be maintained. “In case of food price caps, the range of products with a price cap could be widened, and the government could make a decision on these in the next few days,” he stated.

 

“The future of these price caps will be determined by inflation, which has not peaked yet,” he added.

 

Nagy went on to say that October’s inflation moved up to 21% and “it could be near 25% by the end of the year where it could turn around.”

 

Last month’s inflation data is due to be published later in the week, the Reuters report adds.

 

The Minister for Development said Hungary’s economy may likely grow by 4.5% in 2022 before slowing down in 2023.

 

In September, inflation in Hungary exceeded 20%, surpassing market forecasts, driven by a 35.2% rise in food prices and a 62.1% increase in energy prices. This followed the government curbing utility bill subsidies for certain households.

 

According to economists surveyed by Reuters, average inflation in the country is forecast to rise to 15% in 2023 from 14% expected in 2022. Price growth is set to go beyond the central bank’s target band of 2% to 4% in 2024.