Hungary Extends Price Caps on Staple Food

The Hungarian government has extended the price caps on staple food until the end of next April, the Ministry of Agriculture said here on Tuesday.

In a statement released late at night, Minister of Agriculture Istvan Nagy underlined that the price caps work, because "customers buy more of the products that they can get at a more affordable price."

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The minister justified the need to prolong the price caps by "the dragging armed conflict in Ukraine and the high inflation rate created by the failed Brussels sanctions."

The government remains committed to supporting families, which is why it maintains the measure, Nagy said.

In January, the government decided to freeze at their October 2021 level the prices of granulated sugar, wheat flour, sunflower oil, pork thighs, chicken breast and 2.8 percent milk as a measure to combat inflation.

In November, the list was expanded with eggs and potatoes, the prices of which cannot be higher than their levels registered on Sept. 30, 2022.

Last week, Hungarian central bank governor Gyorgy Matolcsy warned that the price caps increase the inflation rate by 3 to 4 percent, as stores make up for their losses on staple food by increasing the prices of other products.

According to the latest official figures, the prices of food products in November were up 43.8 percent year on year.

Last week, however, the Hungarian government decided to cancel its price cap on fuels, pointing at "critical" fuel shortages nationwide.