Orbán cabinet may introduce new profit margin caps in the property and construction sectors
The Hungarian government introduced the so-called profit margin cap in March to reduce the prices of basic food products. Afterwards, they turned to banks and telecommunication companies and slammed unfounded price increases that should be halted. In a post, National Economy Minister Márton Nagy mentioned insurance companies as their next target. According to a Hungarian economist, the Hungarian government will wait for the April-May inflation data. If the figures are worse than expected, they will introduce profit margin caps in the property and construction sectors.
A successful scheme, says the government
According to Márton Nagy, Hungary’s National Economy Minister, the profit margin caps they introduced in March were very successful. Based on a recent Facebook post, 890 food products became cheaper thanks to the measures introduced.
In another post, he said they would like to terminate unfounded price increases in the banking, insurance and telecommunications sectors. Earlier this week, Mr Nagy said they would like to expand the scheme to household goods and toiletries. Furthermore, instead of phasing out the system – in line with a retailers’ association bid –, they would extend its deadline until the end of the summer. Nagy ambitiously added that, in some form, profit maximisation may remain with us forever.
Profit margin caps may come in the property purchase and construction sectors
Economx acknowledged that the measure was successful and added that phasing it out would increase prices significantly again. Csaba Lentner, an economist and professor at the Ludovika University of Public Service, said the EU-champion Hungarian inflation was caused by the profit hunger of the retailers. If the government phased out the measure, retailers would start another round of price increases. He added that the government should uphold profit maximisation since inflation is decreasing. Furthermore, if the government cancelled it, prices would skyrocket again because retailers would not show self-restraint. He added that the government should expand the profit maximisation scheme to the property and construction material sectors.
According to Economx, the Orbán cabinet will decide about the scheme’s expansion next week. On the 21 May session, the government will set a new deadline.
He said that the government would wait for the April-May inflation data. If the figures are worse than expected, such a measure can be introduced.
Readers should know that the Ludovika University of Public Service is a government-favoured institution of higher education where, for example, the Orbán administration would like to relocate teacher training.
Read also:
- Serious accusation from Hungarian expert: Guest workers could have brought a deadly virus to Hungary
- A new Hungarian government decree modifies multiple rules on guest workers