The inflation rate reached a record high of 10.7% in May compared to the same period last year. The last time the inflation was as high was in December 1999, when it was 10%. Compared to April, consumer prices rose by an average of 1.7 %. Core inflation rose to 12.2%.
Food prices increased by 18.6% – margarine increased by 41.4%, bread increased by 37.5%, cheese by 35.4%, dairy products by 30.3%, fruit and vegetables by 12.8%. The prices of alcoholic beverages and tobacco prices rose by 6.4%. Consumers have to pay 11.4% more for consumer durables, 15.4% more for second-hand passenger cars, 10.6% more for new passenger cars and 6.8% more for services than a year ago.
The price caps on electricity, gas, district heating, fuels and some selected groceries, as well as the interest rate freeze on mortgage loans are acting as a brake on inflation. The central bank assumes that all these measures combined will reduce inflation by 5-6 percentage points.
However, inflation is also fueled by the weakening forint and the government’s wage and income policy and the effects of the Ukraine war. Analysts are increasingly critical about inflation. On average, expectations are now based on average annual inflation of around 10% – but this means that price pressure will continue to increase in the coming months.