Hungary’s price caps are very expensive to maintain and should be scrapped, says economics minister

The measures were only meant to ease a price shock temporarily, Márton Nagy said

editor: REMIX NEWS
author: Mandiner
MOL petrol station in Hungary. (mol.hu)

Hungary’s government-mandated price caps are costly to support and were originally meant only to ease the transition after a price shock, Minister for Economic Development Márton Nagy said on Wednesday.

He was speaking on Info Radio’s Aréna talk show, where current economic issues were discussed, including the current price caps on food and fuel implemented by the Orbán administration to help combat the rising cost of living.

“Price stops have fulfilled their role, they are meant to deal with temporary difficulties, but now they are more and more expensive to maintain,” Nagy said.

Regarding the fuel price cap, the minister explained that it was put into effect because the economy had been hit by a price shock. He added that the measure was good as long as the situation was temporary. However, if this becomes permanent, then the price caps are not sustainable, according to Nagy.

Expressing his personal opinion, he said that he believed these measures had fulfilled their role. According to his words, the sustainability of the measures must be considered from the perspective of inflation, and it must also be ensured that the appropriate amount of imports arrive in the country.

Hungary introduced a fuel price cap last November for all buyers, but modified it this July to now exclude company cars. The country also introduced a price cap on six basic food categories this past February.

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