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Hungarian inflation is still sky-high, but what is behind it?
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The big food producers closed a profitable year, but Hungarian inflation remains extremely high. Let’s examine what could be behind this negative phenomenon.
Uncertainty and price hikes
Conflicts between retailers and the major players of the food industry are on the rise. Retailers are in a challenging situation, while the big food companies had a fruitful year.
The increase in profits is partly explained by higher sales due to skyrocketing inflation. Profits grew at a faster pace than sales.
This phenomenon is not unprecedented in the food industry, as the Hungarian National Bank (MNB) says that profit-driven inflation has caused prices to surge more than it was justified by the rising expenses. It is a rational business decision for shops to charge higher prices than justified because of their increased expenditure. MNB added that last year was characterised by great uncertainty. For instance, let’s think of the unexpected tax increase or the price freeze imposed by the Hungarian government.
Needless to say, businesses aim to make a profit. And if the firm has the opportunity, it will raise prices more than it is justified.
However, the problem is that the larger players in the food industry have closed a good year, while the retail sector is suffering because the Hungarian government is imposing an extra burden on them.
REMEMBER – the Economic & Financial wrongfulness – the introduction of CAPPING by the Orban Government, a decision THEY made against ADVICE from those that KNOW – not “Amateurs” pretenders – like within areas of the Orban Government – who PAID to manage the Economy of Hungary, in the BEST interests of citizens.
Orbans Government have FEED inflation, but they still “wack on” that 27% GST, the highest of all the Member Country’s of the European Union.
Nothing is GETTING Cheaper in Hungary – and we the citizens are PAYING and will be made to pay a HIGHER price for the cataclysmic WRONG direction, under Orban – that he has taken us.