Hungary's Average Inflation for 2022 Rises to 14.5 Pct

Hungary's annual average inflation rate was 14.5 percent in 2022, up from 5.1 percent in 2021, the country's Central Statistical Office (KSH) said on Friday. The official target of the National Bank of Hungary (MNB) was 3.0 percent for 2022.

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"The highest price rises were recorded for electricity, gas and other fuels as well as food over the last 12 months," KSH said.

Consumer prices were 24.5 percent higher on average in December 2022 than a year earlier. It was the highest rate since March 1996 and also the highest within the European Union (EU).

In January 2022, in order to ease the burden of inflation on the population, the country's government put a cap on the prices of staple foods, such as granulated sugar, wheat flour, sunflower cooking oil, leg of pork, chicken breast and milk.

Price caps were later added to eggs and potatoes. Despite the caps, a price rise of 44.8 percent was recorded for food in December 2022, compared to December 2021, with the prices of dairy products up by over 80 percent.

In December 2022, electricity, gas and other fuels became 55.5 percent more expensive. Within this category, natural and manufactured gas prices went up by 97.8 percent, and the cost of firewood was 58.6 percent higher than a year earlier.

In the same period, alcoholic beverage and tobacco prices rose by 13.4 percent on average, and the public paid 13.6 percent more for consumer durables. Service charges were up 9.5 percent, according to KSH.

Local business portal Portfolio said that although "inflation continues to wreak havoc, we also have good news," pointing to the fact that the very high rate stayed below analysts' expectations, which exceeded 25 percent.

"Inflation may remain high, above 20 percent, in the first half of the year, then gradually decrease in the second half of the year, and by the end of the year it may fall below 10 percent," Portfolio said. Last December, Prime Minister Viktor Orban vowed to curb inflation to "single digits" by the end of this year.