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Competition Office head points to impact of profit-driven inflation on headline CPI

Csaba Balazs Rigo, the head of Hungary's Competition Office (GVH), said corporate profits were to blame, in part, for high inflation, in an interview published in Thursday's issue of daily Magyar Nemzet.

Rigo said GVH probes had shown that some commerce sector players, among them multinationals that generated profits “in the hundreds of billions of forints” in Hungary, had raised prices of some staples at a faster rate than the increase in costs. In addition to the scale of those “unjustified” price increases, some businesses took advantage of stable demand for some products in spite of the higher prices, he added.

He also said that some shops had tried to cover their losses on price-capped staples by raising the prices of other popular food products, contributing to the high food price inflation.

Rigo acknowledged the disinflationary effect of an online price monitoring platform for food products at big supermarket chains, but said it was “no magic weapon”. He added that the platform, which GVH operates, would continue in 2024 in enhanced form, as the prices of gluten- and lactose-free products were added to the comparison list.

Rigo also pointed to the impact on disinflation of well-timed government measures, efforts by the central bank and GVH’s targeted probes.

Looking ahead, he said GVH would launch in January an analysis of the impact of artificial intelligence on competition and consumer practices.

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