Marketplaces are exempt from the price cap, which will be in force until Dec. 31, Gergely Gulyás said.

The measure is expected to bring the price of eggs down by 25% and that of potatoes by 10%, and curb inflation by 0.1-0.2%.

At a meeting on Tuesday, the government pointed to sanctions-related inflation as the main cause of the Hungarian economy’s ailments, Gulyás said.

Gas prices jump every time the EU announces new sanctions, he said. That is then mirrored in growing food prices, but the government is committed to reducing inflation by half by the end of 2023, he said.

Household energy bills will stay capped up to average consumption, as well as fuel and food price caps for private consumers and interest caps for SMEs.

The government is committed to its scheme to cap energy bills, Gulyás said, adding that the network usage fee must not be passed on to households next year. The government will impose a tax on power producers that provide electricity balancing services, generating 80 billion forints (EUR 199m) over two years, he added.

Govt to Help Retail Trade in Small Communities

Gergely Gulyás, said the government will announce on Monday support measures for shops in small settlements.

Big retailers will not receive government support, however, he added. Various price caps will apply until the end of the year, he said, and any decision to prolong them will be made all in one go.

Gulyás said the rate of inflation was linked to a country’s exposure to the energy market, and Hungary is highly dependent on purchases of gas and oil, which explained why the country’s inflation rate was higher than the European Union average.

Hopefully, gas prices will be lower next year, Gulyás said, adding that electricity balancing service providers would still enjoy healthy profits in spite of the new tax on excessive profits targeting them.