Illustration - Photo: wikipedia

LMP slams government for 'failed' inflation policy

January CPI spikes at 7.9 percent

Consumer prices in Hungary rose by 7.9 percent year-on-year in January, climbing from 7.4 percent in the previous two months, data released by the Central Statistical Office (KSH) on Friday show.

Food price inflation climbed into the double digits, increasing by 10.1 percent. Cooking oil prices jumped 33.4 percent, flour prices climbed 31.0 percent, milk prices rose by 16.9 percent and the price of poultry was up 18.0 percent.

Prices in the category of goods that includes vehicle fuel increased by 11.3 percent, lifted by a 22.5 percent rise in vehicle fuel prices.

Prices of tobacco and spirts rose by 7.7 percent as tobacco prices climbed 10.0 percent.

Clothing prices increased by 4.0 percent and consumer durable prices rose by 7.9 percent. Household energy prices edged up 1.2 percent and service prices climbed 5.2 percent.

Core inflation, which excludes volatile food and fuel prices, was 7.4 percent.

Inflation calculated using a basket of goods and services used by pensioners stood at 7.4 percent.

In a month-on-month comparison, headline CPI was 1.4 percent.

Commenting on the data, KSH deputy chairman Laszlo Windisch said growing inflation was a global trend. January figures were around 12 percent in Estonia and Lithuania, and in the same range as Hungary in Latvia and the Netherlands, he said.

Hungary’s monthly rise of 0.5 percentage point is in the mid-range of that of European Union countries, he said.

Growing food prices have contributed to the January spike, and the price caps introduced by the government will show up in the February figures, he said.

Meanwhile, the government’s utility price caps have offset the strain on households at a time of 75 percent growth of energy producers’ prices, he added.

LMP slams government for ‘failed’ inflation policy

The government’s policy aimed at reducing inflation through capping the price of some food products “has failed”, the co-leader of opposition LMP said on Friday.

Mate Kanasz-Nagy noted that prices in January had been 7.9 percent higher than in the same month a year earlier, adding that the country had not seen such high inflation since 2007. He also added that inflation in the food sector had been even higher, 10.1 percent.

“The government has been unable to handle soaring prices. Its policy of capping prices, reminiscent of communist times, has failed,” he insisted.

The government’s measure of freezing the price of seven kinds of basic foods at the level of last October helps families save a mere 1,000 forints (EUR 2.8) a month, Kanasz-Nagy said, and insisted that reducing the VAT on basic foods to 5 percent would leave a monthly 7,000 forints in each household.

Leave a Reply