Rapidly increasing consumer prices have become a global phenomenon, and Hungary is no exception. The inflation rate recorded in 2022 surpassed that of all other EU member states and
.
Over the past decade, Hungary registered negative inflation rates only in 2014 and 2015, owing to the reduction of utility costs. In the years after, consumer prices followed an increasing trend and peaked in 2022 despite the government’s measures aimed at mitigating inflation, including fuel and staple food price caps and reduced energy costs.
, which might indicate that the state’s soaring inflation is partially a consequence of domestic economic policies. In addition to the impact of the Russia-Ukraine war on energy prices, the depreciation of the national currency and inefficiencies in the domestic food manufacturing industry have contributed to Hungary recording way higher inflation rates in recent years than the European average.
Which products have recorded the highest price increase?
In May 2023,
consumer prices recorded an average increase of 21.5 percent compared to the corresponding period of the previous year, with electricity, gas, and other fuels, as well as food products registering the highest inflation rates at 37.2 and 33.5 percent, respectively. The Hungarian food manufacturing industry is facing a difficult situation due to the
sharp rise in agricultural producer prices and the lack of
grain imports from Ukraine. Among all food products, bread,
milk, and confectionary products recorded the highest price increases in the country. In 2022,
the average price of white bread reached 659 forints, which is 64 percent more than the price registered the year before. As for energy prices, the
inflation rate of gas totaled 114 percent in August 2022, and it decreased to approximately 50 percent by May 2023.
How are Hungarians handling the rising cost of living?
The majority of the population was compelled to alter their spending habits in order to cope with the significant increase in costs. Hungarians were most likely to
cut back their expenses when it comes to purchasing apparel and food products. Consequently, an increasing number of consumers is switching to store brands and more affordable alternative products. However, the findings of a survey conducted in 2023 highlighted that, despite their efforts, only 10 percent of households allocated
up to 20 percent of their income to food supplies, indicating that the remaining families had to spend a significantly larger portion of their earnings to purchase necessities.
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