As part of the government’s efforts to tackle inflation, as of 1 August the mandatory food price reductions will increase to 15 per cent, and the range of products to be included in the price reductions will also expand, as highlighted in a statement by the Ministry of Economic Development (GFM) on Monday.
The measure aims to protect families and pensioners from the increased food prices caused by the war and sanctions, while also contributing to further reducing inflation. The mandatory food price reductions were launched on 1 June and data show that they have been successful: food prices have decreased, and retail chains are announcing new discounts one after another, which helps curb inflation.
To further intensify price competition, the government decided to raise the level of mandatory discounts from ten per cent to at least 15 per cent starting today. Additionally, the government will phase out the food price caps that have been in effect for one and a half years, extending the mandatory discounts to the product categories in question. Thus, essential food items will continue to be available at favourable prices. Currently, the mandatory discounts cover poultry, pork, and beef, fish and canned fish, meat products, milk, sour cream, and substitutes, yogurt and other fermented products, other dairy products, cheese, butter, margarine and margarine-based products, other fats, bread, bakery products, dry pasta, rice, other cereals, flour, sugar, and preserved flour products, fresh vegetables, fresh fruits, fruit and vegetable juices, ready-made meals, spices, seasoning products, coffee, tea, mineral water, and soft drinks, as listed by the GFM.
From August onwards, the mandatory discounts will also apply to granulated sugar, wheat flour, sunflower oil, pork leg, chicken breast and chicken thighs, 2.8 per cent UHT milk, eggs, and ware potatoes.
The government successfully generated a price competition between retail chain with the mandatory discounts and the online price monitoring system, drastically reducing food prices. As a result, inflation may decrease to a single-digit figure before the end of the year, the GFM emphasised.
Apart from the 15 per cent discount on foodstuffs, the government has also introduced new measures related to the SZÉP card to assist families. Through a tax incentive provided by the government, employers can top up their employees’ SZÉP cards with an additional 200,000 forints, which can be used for food purchases until the end of the year. The GFM emphasised that the protracted war and misguided Brussels sanctions are causing significant damage to the economy. In this difficult situation, the government is doing everything possible to restore economic growth and protect families and jobs.
According to the ministry, the increase in the SZÉP card limit will boost tourism demand, and expanding its usage will significantly increase the purchasing power of families. Besides enhancing consumption, it will support the food industry as well, and will ultimately contribute to the growth of the Hungarian economy and safeguard jobs, the statement stressed.
Source: Hungarian Conservative/GFM/MTI