Without a war, there would be no such level of inflation, that's for sure, but even so, there is nothing to justify this year's flaming prices in Balaton. Vasarnap.hu tracked inflation with economist Katalin Botos.
- To what extent is inflation the result of the Russian-Ukrainian war?
- It is clear that there was no war without inflation. If it has to be spent on unproductive purposes, then the money flows out to production, it becomes purchasing power, which is not opposed by the consumption goods base.
This is the case even if production is diverted from "butter" to cannon, but also if part of the "butter" is used to help war refugees.
It is indisputable that the Russian-Ukrainian war is largely responsible for the current inflation. By the way, war psychosis always makes you accumulate reserves, which increases the tension in trade. If there is no price increase because it is not allowed, it leads to shortages…
"Have we also had such shortages?"
- In those countries where the lack of energy caused price increases , of course, this is the direct reason. Here, the government postpones this effect in time. Because, on the one hand, there is not as big a shortage of energy as elsewhere, and on the other hand, state price regulation temporarily curbs the effect. In other words, it puts the loss partly on the traders. Of course, if the profit of these companies is less, then the tax will be less. Thus, in the end, the public finances also lose. So, in a delayed way, but the effect will definitely be there.
Tax revenue, which would have come from excise taxes, for example, is decreasing. Thus, this income will temporarily be less. However, it would obviously have had its intended place in the budget.
- Are there other reasons behind the soaring inflation?
– Of course, there are other factors. Above all, the economic crisis that appears together with the coronavirus. Who could have seriously thought that there would be no consequences to the fact that the government supports workplaces so that they pay wages even without performance? That the companies - in order to retain the workforce - even took such steps on their own. We think it is right that the government supported the retention of jobs, but the consequences must be taken into account.
The money went out, the commodity base did not grow... Delayed in time, this is and will be included in the price changes. Everywhere, including here.
The full article from Vasarnap.hu can be read here.
Author: Gábor Tóth
Image source: Pixabay
