Hungary Set to Phase Out Price Caps As Inflation Falls

  • 3 Apr 2023 5:50 AM
  • Hungary Matters
Hungary Set to Phase Out Price Caps As Inflation Falls
The government will phase out the current price caps simultaneously with a decrease in the inflation of food prices, Prime Minister Viktor Orbán told public radio.

The caps have helped reduce inflation but they were an “artificial intervention” in the operation of the market, and had “side effects”, he added.

“That is why it is good if the caps disappear from the system and the market returns to its regular operations,” he said. As long as inflation is high, the caps cannot be removed, he added.

Orbán suggested that similarly to the food price caps, the caps on bank loans could also be removed.

Concerning bank loans, he added that “we introduced all kinds of protective mechanisms but those could even cause problems in normal times”. The prime minister added, however, that the caps on household utility prices would be maintained.

“When inflation drops under a certain level, measures introduced to rein in high inflation could be removed in a timely manner,” Orbán said. He noted that the government’s target was to get inflation down to single digits by the end of this year.

Retailers and food chains are already competing with each other on who can offer lower prices on various products, he added.

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