At market prices, we would have to pay an average of 15-20 percent more for products and services that fall under the price cap introduced by the government. The price increases experienced worldwide are not over yet, market effects will further increase inflation in most countries in the coming period. In Hungary, February inflation will be lower than January, as the effect of the food price freeze is already taking effect. The fixed price affects about 15 percent of the monthly expenses of an average adult.
The price freeze protects Hungarian families from significant additional expenses. It can be seen that the market price of products and services regulated by price caps can be 15-20 percent higher than what Hungarian households now have to pay for them.
Moreover, the price-reducing effect of the government's actions is even more significant for those households where the government's decision to fix the interest rate on variable interest loans protects against a jump in loan installments.
The utility reduction introduced in 2013, fuel prices fixed at HUF 480 per liter last fall, the interest freeze on variable interest bank loans and the food price freeze that came into effect in February are already protecting families from a significant increase in their expenses.
At the same time, the period of global price increases is far from over, so the decisive steps of the government will play an even more significant role in the future.
In Western Europe, too, the unprecedented rapid increase in the world market price of energy carriers is a heavy burden for the population. Even in states with better incomes, an ever-increasing number of people cannot afford to pay utility costs that rise by 50-150 percent.
You don't have to worry at home. Fixed-price utilities, fuel, and affected staple foods account for 15.2 percent of a person's average monthly consumption. This is a significant rate, these expenses would have increased by 15-20 percent in just three months without price fixing. In the future, the savings will be even more significant, as market forecasts predict further increases in consumer prices.
The difference between the market price and the price fixed for the protection of Hungarian families continues to grow. This is also true for basic foods. You can buy the well-known pork leg, chicken breast, chicken back, cooking oil, granulated sugar, fine wheat flour and 2.8 percent UHT milk at a fixed price from February to May, and traders cannot sell these for more than the mid-October price.
Without the government's price-restricting measures taken before February in Hungary
inflation could have reached ten percent in January. Based on world market processes, it is not yet possible to accurately predict when the balance of supply and demand will be restored, which would represent the first step in the consolidation of prices.
Therefore, the government will extend the already introduced measures if necessary and, if necessary, take other steps to reduce inflation and protect families. It is important that wages will increase significantly this year, so even with higher inflation, most employees can count on a significant increase in real earnings.
Source and full article: magyarnemzet.hu
Featured image: infostart.hu
