Hungary’s record inflation corrodes Orbán’s popularity

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The Hungarian government is struggling to combat a record price hike in Europe, which hurts the most vulnerable and hurts the popularity of Viktor Orbán, a controversial head of government who often presents himself as a defender of families and pensioners. Just the most punished.

At the gates of Christmas, Hungarian inflation gallops to levels not seen for 25 years, is among the four highest in the European Union and punishes the most vulnerable sectors, with problems even to pay energy bills.

In recent months inflation in Hungary soared and reached levels not seen since 1996, exceeding 21% year-on-year and in the case of some foods, such as eggs, the increase has been up to 87%.

“I don’t even make comparisons with last year’s prices anymore. I buy salami (one of the traditional products in Hungary) only if it is at a discount,” a pensioner at Budapest’s Central Market told EFE, adding that he tries “not to think about Christmas.”

He himself adds that in supermarkets the discounted products “disappear immediately”. This was not the case last year.”

Inflation mainly affects the most vulnerable sectors, such as retirees or professors and teachers, who have very low salaries.

The complaints have even gone viral, in the social network Tik-Tok a video was shared a lot in which a Hungarian retiree, Mrs. Rozika, complains crying that she has no money for heating or eating, and that at 71 years old she is “about to die of hunger”.

ONE OF THE HIGHEST INFLATIONS IN THE EU

According to data from the Central Bureau of Statistics (KSH) in October the price of various foods cost much more than a year earlier and the price increase was 81.4% in the case of bread, 71.6% in the case of butter and 75.4% in general in the case of dairy products.

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For some of these products, Hungary has the highest inflation in the EU.

“The Hungarian forint has registered a fall in its value not seen in other countries in the region, the Hungarian economy is open, there was a significant increase in salaries and the Government has applied extraordinary taxes to several sectors,” lists to EFE the internal causes that generate inflation in the country, Zoltán Török, analyst at Raiffeisen (VIE:RBIV) Bank.

Although the government has introduced a price cap on several foods, such as, among others, oil, eggs, milk and also gasoline, experts point out that these rather generate and lengthen inflation instead of alleviating it.

It is a political message, said Török when stating that “the price cap in general is a measure that serves political communication and in reality what happens is that these products either disappear or the price of others increases.”

It worsens the situation that the European Union continues to freeze the disbursement of some 7,500 million euros of community funds for the breach of the rule of law by the Orbán Government.

IS BRUSSELS TO BLAME?

The government, which had already determined the maximum price of gasoline months before the Russian invasion of Ukraine, now says that what Europe faces is a “war inflation”, caused by Brussels sanctions against Moscow for the war.

Orbán himself speaks of the “inflation caused by sanctions” and recently stated on Kossuth public radio that “this is due to the erroneous sanctions of Brussels.”

Despite government campaigns, fewer and fewer Hungarians believe that it is only sanctions that cause the rise in prices and, according to a recent survey by the “Research Institute 21”, 37% accept what Orbán says, but 46% blame the government for inflation.

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Others say that “until Orbán is in the government nothing will change,” as assured EFE in the same Budapest market, Éva, a retiree who says that inflation eats up a large part of her pension.

“He (the government) has promised an increase of 10% for January, but of course, that does not help much,” he says, referring to food inflation exceeding 40%.

PERSISTENT INFLATION

Hungarians have already started saving and since September there has been a significant reduction in energy expenditure, saving with light and heating, Török said.

“People started buying private label products and go to restaurants less and less,” he said some of the signs that Hungarians are already preparing for persistent inflation.

The price increase “has not yet reached the peak and in December could be up to 25%,” emphasized the analyst, who at the same time predicted that inflation will remain around 20% until at least spring.

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