Extraordinary decisions: new food price caps, excess profit tax introduced in Hungary – UPDATED

Gergely Gulyás, the prime minister’s chief of staff and government spokeswoman Alexandra Szentkirályi, talked about the extraordinary decisions of the Hungarian government in a press conference starting at 10.30 am today. They shared the government’s latest decisions on how to curb skyrocketing inflation and how the administration extended the food price cap scheme. Below you may read the details.

According to index.hu, Gergely Gulyás opened the press conference. He said that the government discussed the economic situation, EU affairs and questions of energetics at Tuesday’s meeting. They concluded that the biggest problem was the inflation triggered by sanctions. Food prices soared because of the skyrocketing energy prices. Furthermore, until the EU did not end its sanction policies, inflation would remain (editor’s note: the Hungarian government voted for all the EU sanctions).

The government intends to lower the inflation to one digit by the end of 2023. That is why they keep the utility, food and fuel price cap schemes and extend the mortgage rate cap.

Read alsoExtraordinary decisions: new food price caps, excess profit tax introduced in Hungary – UPDATED

Furthermore, Gulyás announced that the government would extend the food price cap scheme on potatoes and eggs. Their price rise exceeded 40 percent compared to 2021, mfor.hu found. The retail price of these two products cannot exceed 30 September 2022 figures.

That means the price of eggs will decrease by 25 percent, while potatoes will cost 10 percent less. The measure may result in a 0.1-0.2 percent inflation rate decrease. Marketplaces are exempt from the price cap, Gulyás added.

He said the government would decide on the utility costs until 31 December. Network use prices would not increase for the citizens, he added. However, energy prices would be higher next year, but the government would protect residential consumers, Gulyás pledged. Therefore, the government will introduce further excess profit taxes that will apply to power plants providing balancing power. In 2022, its rate will be 13 percent. In 2023, that will be only 10 percent. The measure would result in a HUF 40 billion (EUR 100 million) additional tax revenue for the state budget in 2022 and 2023, Gulyás cleared.

Gulyás said the country did everything to get access to the EU funds. They believe EU concerns regarding the Hungarian judicial system are ungrounded. However, they will make all the modifications in the system that do not contradict the Hungarian national interests.

He said shops in small settlements would receive government support to compensate their losses caused by the food price cap scheme.

Read alsoExtraordinary decisions: new food price caps, excess profit tax introduced in Hungary – UPDATED

Source: index.hu