Europe

Hungary is about to face brutal inflation

In July, inflation reached 13% compared to the previous year’s data. To add fuel to the fire, July’s calculations do not yet include an increase in overhead costs. Hungary is already suffering from high prices, but real inflation is about to set in.

Inflation in Hungary may have jumped to 13% in July, according to the report. portfolio‘s survey. In June, KSH measured his annual price increase of 11.7%. This means that the rate of currency depreciation is expected to accelerate even more significantly.

What factors can cause inflation?

We don’t yet know the impact of higher overhead costs, but there are other drivers of inflation.

Factors include:

  • Forint Weakening
  • Secondary effects of special taxes integrated into prices
  • Increased tipping tax (NETA) and excise tax
  • war-induced supply shortages and rising raw material prices in production
  • food shock
  • strong household demand
  • Continued incorporation of market energy prices that influence other products and services

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Inflation could peak at 16-17% in the fall

Experts believe the price hike Hungarians experienced in July is just the tip of the iceberg. Inflation is likely to peak at 16-17% in the fall, and won’t drop much by the end of the year. Forecasts for the end of 2022 clearly show how quickly price increases have accelerated. His December inflation expectations in January had him at 3.4%, but in April he surged to 8.6%, and four months later he reached 16.5%.

See record price increases here

according to Merce, margarine holds the highest price increase record at 41.4%. However, bread prices he followed closely at 37.5%. Cheese also rose 35.4%, poultry 34.3%, dried pasta 33.3% and dairy products 30.3%.

In addition to falling forints and rising raw material prices, we will also have a major drought this summer. Grain yields were also very low in Hungary due to drought caused by climate change.The National Agricultural Cooperatives and Producers Association calculated that drought could increase the price of food wheat by up to 30-40%. I have.

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sauce: portfolio.hu, merce.hu

https://dailynewshungary.com/hungary-is-about-to-face-brutal-inflation/ Hungary is about to face brutal inflation

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